Value Averaging: The Safe and Easy Strategy for Higher Investment Returns

Preface to the 1993 Edition

This book evolved out of an article I wrote titled “Value Averaging: A New Approach to Accumulation,” published in the AAII Journal X, no. 7 (August 1988). That article introduced an effective formula investment strategy that was a bit more complex than dollar cost averaging (constant dollar investing) but provided higher returns and other potential advantages. Over time, over a thousand investors called or wrote me with several questions, comments, enhancements, or other ideas. So this book was written with investors in mind—investors who want a clean and easy system for accumulating and moving their wealth through time to achieve their financial goals. It's not for investors who want to get rich quick; getting rich slow is a noble enough financial goal to achieve.

After trying the latest gimmicks and following the current gurus in a futile quest to outwit and beat the market, some investors are actually satisfied with a fair return for the risk taken with their investment dollar. And, as you'll see in Chapter 1, the stock market really does provide a good return over time; there just doesn't seem to be much guidance for the intelligent individual investor on how to achieve these reasonable investment goals effectively. In this book, I attempt to provide and analyze some reasonable and effective ways to build up wealth over time. As opposed to haphazardly jumping from one fad to another, I recommend some disciplined, systematic approaches that allow ...