When stocks like Rocket Lab (RKLB) and Applied Digital (APLD) suddenly blast off with 16-17% gains in a single session, the rest of us are left standing on the platform, watching the opportunity train pull away. It's that stomach-dropping moment every investor knows all too well: do I run after it or wait for the next one?
I've been covering market psychology for years, and this particular anxiety – the fear of missing out versus the fear of buying the top – remains one of investing's most persistent psychological traps.
Look, there are basically two investment philosophies at war here. The "time in the market beats timing the market" crowd has mountains of data on their side. Miss just the 10 best trading days over a couple decades and – poof! – there goes half your potential returns. Miss the top 20 days and you might as well have stuffed that cash under your mattress (though with inflation what it is these days, even that's not the safe harbor it once was).
Then there's the "buy the dip" contingent. These folks pride themselves on patience, hovering like predators, waiting for momentary weakness. It's a strategy that works beautifully... except when it doesn't. Sometimes that dip you're waiting for never materializes, and you're left watching from the sidelines as prices climb relentlessly upward.
What's particularly maddening about RKLB and APLD is that neither company emerged from obscurity. Rocket Lab has been a known player in the increasingly competitive space launch sector for years. Applied Digital, meanwhile, has positioned itself squarely in the AI infrastructure gold rush. Their jumps didn't happen randomly – though trying to predict exactly when they would occur is another matter entirely.
So what's an investor supposed to do?
The smartest approach I've seen – and one I've employed in my own investing – is position scaling. Instead of the binary "all-in or stay-out" decision, you build positions incrementally. Start with maybe 30% of your intended position now, then add more either at set intervals or at predetermined price points if those hoped-for dips materialize.
This strategy acknowledges a humbling truth about markets that many professionals won't admit: nobody – and I mean nobody – knows with certainty where these stocks are headed tomorrow. RKLB could announce another successful launch and surge another 15%. Or they could experience a setback that creates your perfect entry point. The AI enthusiasm propelling APLD might continue unabated, or we might see a sector rotation that temporarily cools things off.
I've interviewed dozens of professional money managers over the years, and the honest ones all admit the same thing. The question isn't really about perfect timing – it's about investment horizon and conviction.
If you genuinely believe Rocket Lab will be launching payloads and capturing market share for the next decade, does a 16% difference in entry point matter much over that timeframe? Mathematically, probably not. But psychologically? It feels enormous right now.
Your personal circumstances matter tremendously here. Investing a lump sum that represents a significant chunk of your portfolio? That timing question weighs heavier. Deploying regular capital as part of a systematic investment program? The answer might be simpler: stick to your schedule, but maybe adjust position sizes based on your conviction level and current valuations.
The paralysis that comes from waiting for the perfect entry point is something I've seen ruin more investment returns than almost any other factor. Some investors are still waiting for that perfect moment to buy Apple... since 2005.
The dirty little secret? There is no perfect system. Every approach involves trade-offs. The "time in the market" adherents occasionally buy at peaks, while the "buy the dip" faction sometimes misses tremendous runs entirely.
Whatever approach you choose, remember this: the biggest investment mistakes rarely come from paying slightly too much for good companies. They come from either missing quality companies entirely or – far worse – buying the wrong companies at any price.
Maybe I should just tell readers to flip a coin and be done with it. Heads you buy now, tails you wait for a pullback. At least that would honestly acknowledge the role of randomness in short-term price movements.
But I won't say that. And you shouldn't do it either.
In the end, the answer might be less about timing and more about temperament. Can you live with the possibility of immediate paper losses? Can you stomach watching from the sidelines if the rocket ship keeps climbing? Those questions, more than any market analysis, likely hold the key to your decision.
