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

Index

American Association of Individual Investors, 25

Annuities, 60–63

Approximate growth-adjusted DCA formula, 74

Arithmetic mean, 22–23

Asset allocation strategies, 2

Beta, 23, 174, 180, 181, 190

Black Monday, 151

Bonds, 14, 15, 70, 192

Buy-and-hold strategy, 20, 37

Capital gains tax

cap, 114

deferring, 101–107, 178

Closed-end mutual funds, 188

Compounding, 7, 22–23, 58, 80

Constant-ratio plans, 2

Constant share (CS) purchase strategy, 28, 30–36, 37–38, 48, 52, 127, 162–164, 168

Contrarian strategies, 144, 147

Corporate bonds, 14, 15

Correlation coefficient, 190

Deferred gains, 101–102

example of, 102–103, 106–107

Distribution

of eight-year stock returns, 13

of four-year stock returns, 12

of market returns, 9–13

of one-year stock returns, 11, 18

of random stock returns, 124, 125

standard normal, 17

Diversification, 9, 34, 169–170, 174, 175, 190

time, 8, 32, 37–38

Dodge & Cox Stock Fund, 175

Dollar cost averaging (DCA), 25–26, 36–37

definition of, 1–2, 25

example of, 26–28, 49, 202–214

fixed amount, 35–36, 63

growth-adjusted, 71–80

growth equalization of, 35–36, 56

internal rate of return, 28, 29

investment

frequencies, 163, 164, 166–167, 179–180

return and taxes, 200–202

targets, 57–63, 88, 199–200

long-term problems with, 34–36, 71

over five-year periods, 32–34, 49

over one-year periods, 30–32

readjustment of, 63–71, 205–213

spreadsheet for, 83–85

short-term performance of, 28

table, 27, 31, 33, 142

versus VA, 55–56, 168

Donnelly, Barbara, 150

Down-shifting risk, 69–71

Effective ...