Chinex Investment Radar: Don't Fear the Drop — Backtesting Reveals That Consistent Bottom-Fishing Is the Winning Strategy

Markets have been swinging wildly lately, leaving many investors wondering: "Should I keep adding now?" Many are choosing to disable the 'Super Bottom King' top-up mechanism, fearing they'll buy lower and deepen losses. However, looking back at history and simulating performance across the past four major market crashes, we find that the real danger lies not in buying low, but in giving up halfway.

We simulate three different investment approaches to compare performance at different entry points:

Dollar-Cost Averaging (DCA): Invest a fixed NT$10,000 monthly.

Super Bottom King: In addition to the monthly NT$10,000, add NT$20,000 when the market drops 5% or more.

Super Bottom King (Panic Stop Version): Same as above, but when market fear spikes (VIX index exceeds 30), temporarily halt top-ups and maintain only the monthly DCA until fear subsides.

1. Entering at Market Peaks: Super Bottom King Helps Navigate the Dark Period

Entering at market highs, only to face an immediate downturn, is the most anxiety-inducing scenario. Yet backtesting shows that even when entering at pre-crash peaks in 2000, 2007, 2020, and 2022, the Super Bottom King strategy outperforms both the panic-stop and plain DCA strategies over 1, 3, and 5 years. For example, entering at the 2020 peak, the Super Bottom King delivered a 91.8% return after 5 years, compared to 70.8% for the panic-stop version. Even after the 2000 dot-com bubble, Super Bottom King consistently outperformed other strategies across all timeframes. This shows that even if you buy at the top, consistently adding during downturns can still yield strong long-term returns.

2. Entering When Stocks Drop by Half: Top-Up Mechanism Enhances Rebound Capture

Many investors enter when they feel "the market has fallen enough." We simulated investing after a 15% drop from peak. Though not the lowest point, pairing this with a top-up mechanism significantly boosts results. For example, entering mid-way through the 2008 financial crisis, DCA returned 26% after 5 years, while Super Bottom King reached 42.6%. Entering mid-pandemic in 2020, Super Bottom King achieved a 63.4% cumulative return over 5 years, clearly outperforming others. Even without catching the exact bottom, a sound strategy with steady execution makes top-ups an effective performance booster.

3. Entering at Disaster Lows: The 'Kangaroo Market' Is Where Super Bottom King Shines

Backtesting shows that if you truly enter at the market bottom, all strategies yield solid returns. For instance, entering at the 2009 and 2020 lows, all three strategies delivered over 50% returns after 5 years, with minimal differences. However, this doesn't mean Super Bottom King adds no value at lows. In 2002, the market didn't rebound sharply after the bottom but entered a prolonged 'kangaroo market' — highly volatile with no clear trend. In this choppy environment, Super Bottom King kept adding during dips, achieving a 43.9% return over 5 years, clearly outperforming DCA (38.6%) and panic-stop (34.7%). This shows that the more volatile and emotionally charged the market, the more critical it is not to stop top-ups due to short-term fear. Real opportunities are often accumulated bit by bit amid uncertainty.

4. Leverage Super Bottom King’s Two-Stage Top-Up to Seize Market Volatility Opportunities!

Historical bottoms are only clear in hindsight, often accompanied by extreme fear and pessimism. Investors who wait for "even lower prices" risk missing the early rebound. Backtesting shows that DCA into the U.S. stock market over 30 years yields a 636% cumulative return, but with 'Super Bottom King’s two-stage top-up,' it reaches 701%. For investors, the key isn't timing the absolute bottom, but staying in the market and investing in stages during corrections. By using 'Super Bottom King' to automatically top up during market drops, you turn panic into an opportunity to accumulate positions, maximizing long-term gains when the market recovers.

Source: Bloomberg, compiled by Chinex Buy Fund. S&P 500 Index, calculated in TWD. Data period: 1996–2026, data date: 2026/7/21. This data is for simulation and historical backtesting only. Direct index investment is not possible. Past performance does not guarantee future results. Different fund trends, allocations, and periods may yield different outcomes. Entry timing affects performance. Monthly DCA: NT$10,000 invested on the 5th of each month. Super Bottom King two-stage top-up: When the index NAV drops 5% from the 10th previous trading day, top up NT$20,000; at 8% drop, top up NT$40,000. If both triggers are met, only the larger amount is deducted.

Chinex Investment Strategy

When Markets Panic, Stick to the Strategy

Historical backtesting shows that regardless of entry point — peak, mid-drop, or bottom — only consistent execution of the top-up strategy, with staged deployment and long-term holding, offers the chance to fully benefit from market recovery. In contrast, pausing top-ups due to panic or exiting at the wrong time drags down overall returns. This reaffirms: "Volatility isn’t the risk — stopping is."

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