Comments on: Value Averaging: An Automated Investment Strategy

By: Craig

Craig — Tue, 29 Jun 2010 20:42:22 +0000

@Minda
I think your exactly right. Somethings are hard to figure out the final amount needed.

By: Minda

Minda — Tue, 29 Jun 2010 12:34:30 +0000

Sounds like a good way to save for a predictable expense like college or a down payment for a house. Retirement would be harder because it’s hard to figure out what you’ll need and you have to work with contribution limits and other rules.

By: Craig

Craig — Mon, 17 May 2010 11:03:47 +0000

@Fede
In your case it doesn’t seem like value averaging will work. Value averaging is for people with a savings goal and money to continue investing on a regular basis. In your case you might invest it all at once or spaced out over a few months depending on the amount.

By: Fede

Fede — Mon, 17 May 2010 08:10:31 +0000

How can I set up a value path if I have a lump sum to invest but not a saving goal?

By: Craig

Craig — Sun, 02 May 2010 20:44:35 +0000

@Anthony,
You’re right about buying the same number of shares – that was a misprint. It should say that you are investing the same number of dollars.
No doubt there is more work involved.
Thanks for the comment.

By: Anthony

Anthony — Sun, 02 May 2010 13:48:34 +0000

I have to disagree with this statement: “With dollar cost averaging, you are always buying the same number of shares each and every month.”

This is simply not true. Suppose I invest $100/month regularly (via the DCA method). In Month 1, I could buy stocks/bonds/CD’s/index funds/whatever-other-type-of-investment at $1.00 a share for 100 shares. In Month 2, I am still investing $100/month. But in Month 2, the stock is now $2.00 a share. You can then only buy 50 shares.

Clearly then, you’re NOT buying the same number of shares each and every month. That is the point of DCA.

I will agree that value averaging (VA) goes past DCA in buying even lower when the market is down. Unfortunately, *I* personally feel that it’s market timing…

But the biggest disadvantage, as you mentioned in your article, is the level of involvement required. I’m investing in my 401(k). I’d rather leave it at a set percentage in order to reach the IRS limit each year. If I do VA, I’d change my contribution percentage on a regular basis and would never know if I’m on “track” to reach the limit.

By: DFA Link Rally: I Bought a Scooter!

DFA Link Rally: I Bought a Scooter! — Sat, 01 May 2010 19:03:48 +0000

[...] an Emergency Fund? by Adam44 Reasons Why I Want to Become an Entrepreneur by The Financial BloggerValue Averaging: An Investment Strategy by Craig FordHow To Get An Expensive College Education For 80% Less by Wealth PilgrimRoth IRA vs [...]

By: Index Funds, Mutual Funds, & ETFs Defined

Index Funds, Mutual Funds, & ETFs Defined — Fri, 16 Apr 2010 14:55:08 +0000

[...] strategy do you use? Do you buy funds once a year, do you dollar cost average, or do you used a be averaging investment strategy? The more frequently you trade the more you should look at ETFs as they typically have the lowest [...]

By: Greed and Fear: The Best Investments & Best Investment Strategy … | Investment Finance Wisdom

Mon, 29 Mar 2010 20:16:10 +0000

[...] Value Averaging | An Automated Investment Strategy [...]

By: Budget blues

Budget blues — Sat, 27 Mar 2010 10:55:45 +0000

[...] Value averaging: A new automated strategy – Money Help for Christians [...]