Dip Tranches Strategy

A disciplined framework for deploying a cash reserve into broad-market US equity index ETFs (VOO, IVV, SPLG/SPYM, SPY) during market drawdowns. The goal is to avoid the two failure modes most retail investors fall into: (1) firing all dip-buying cash at the first -5% pullback and having nothing left when -25% arrives, and (2) sitting in cash forever waiting for a crash that doesn't come.

Mandatory framing

Before applying this framework, always remind the user:

• This is an analytical framework, not personalized financial advice. The user should consult a fee-only fiduciary CFP before deploying significant capital.
• This framework assumes a long-horizon investor (10+ years) treating the cash as growth capital, not their entire net worth.
• Before any equity deployment, the user should have: an adequate emergency fund (3-6 months expenses), high-interest debt paid down, and clarity on time horizon.
• Past drawdown patterns don't guarantee future ones. The framework can fail in a structural bear market that doesn't recover for years.

The portfolio split

For a given investable cash amount, split it into three buckets: