Example Value Averaging Investment Scenario:
The client wants to invest $120,000 but is unsure about their entry point. You recommend Value Averaging over the year, and explain to them the target is to have $10,000 invested in month one, $20,000 invested in month two, $30,000 invested in month three, so on and so forth….
The client begins with $10,000 invested on January 1st, and in January the portfolio drops, leaving you with $9,000. Following the established Value Cost Averaging game-plan, the client would then invest $11,000 more on February 1st to bring the total position value to $20,000.
In February, the portfolio jumps, and now the client investment is worth $23,000. On March 1, you invest $7,000 so that you now have $30,000.
“Value Averaging: The Safe and Easy Strategy for Higher Investment Returns” By: Michael Edleson
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