History shows it has paid off to buy stocks after major plunges.

An investor buying the S&P 500 (^GSPC) 10% below its high, regardless of whether it was the trough, would have netted a median return of 15% over the next 12 months, according to new research going back to 1950 from Goldman Sachs (GS) strategist David Kostin.

Kostin notes there have been 33 S&P 500 corrections of 10% or more since 1950. The median episode has lasted roughly 5 months and encompassed a peak-to-trough decline of 18%.

A history lesson such as this is helpful for investors as they figure out what the next move is following a very volatile January for markets.

The Nasdaq Composite (^IXIC) is headed for its worst start to a January ever. At a 10% drop through Monday afternoon (aka the index is in a correction), the Nasdaq's January could surpass the 9.9% decline seen in January 2008, which had been the worst.

About 46% of the Nasdaq’s members are down at least 50% from their 52-week highs, according to Charles Schwab chief investment strategist Liz Ann Sonders. Zooming out doesn’t paint a better picture. Roughly 76% of the Nasdaq’s members are down at least 20% from their 52-week highs.

Meanwhile, stocks trading on sky-high valuations — mostly reserved to the tech space — have been slammed as traders model in lower-than expected future returns due to rising rates. AMD (AMD) shares have plunged 23% in January, Etsy (ETSY) has shed 33% and Netflix (NFLX) is off by 36%.

There are two parts to the 'buy-the-dip' phrase: Buy the dips and sell the rips.Interactive Brokers Chief Strategist Steve Sosnick

It's not just tech

Pain has been felt outside of tech, too. The Dow Jones Industrial Average (^DJI) and S&P 500 are down 4% and 6%, respectively in the month.

Within the Dow, 19 of its 30 components are down on the year, paced by more than 12% declines for Salesforce, Nike and Cisco.

Some of the most bullish moves in 2022 have come in perceived safe-havens such as consumer staples such as Coca-Cola (KO) (shares up 3% year to date) and gold (GC=F) (up slightly).

Despite the unknown further impact to stocks from rate increases actually kicking in this spring, pros are staying hopeful that the buy-the-dip investing tactic — in some form — will stay alive this year.

"There are two parts to the 'buy-the-dip' phrase: Buy the dips and sell the rips. We have kind of forgotten the second part of that. I think this is an environment you are going to get the opportunity to do both," said Interactive Brokers chief strategist Steve Sosnick on Yahoo Finance Live.