Value averaging
Value averaging
Value averaging is an investment strategy whereby the investor makes periodic contributions according to a monthly value growth target. Say, for example, that an investor's target is to build the account value by $1,000 quarterly. After one quarter, the account has grown by $800. The investor, therefore, would contribute another $200 to the account to reach the $1,000 goal. This strategy leads the investor to purchase more when values are decreasing, and less when values are increasing.
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