If you can do the mental work to separate your sentiment about a stock from its recent price action, buying the dip in a recently dented winner can be a profitable investing strategy. Of course, it's key that you determine whether a business is experiencing a temporary setback or a more durable downturn before making the decision to buy. That can make the difference between buying the dip and making more money later, and buying the dip only to see your investment's value decline further.

On that note, Compass Pathways (NASDAQ: CMPS) stock fell by 9% on June 4, and the stock is down 20% this year so far. It didn't report any bad news on that day, nor has it done so this year. So is this a great opportunity to buy the dip, or is the recent decline a symptom of a more serious issue?

Compass is developing interventions for mental health issues. Its interventions are, at their core, molecules that are known to the public as psychedelic drugs, like psilocybin (the active ingredient of "magic mushrooms").

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Source Fool.com