Value Averaging

High on my must-read list for asset allocators is Michael Edleson's Value Averaging: The Safe and Easy Strategy for Higher Investment Returns. It is the ultimate "how-to" book for modifying the venerable dollar cost averaging (DCA) method to changing market conditions. Essentially a combination of DCA and rebalancing, value averaging provides a formula for increasing returns by investing more at lower prices.

Out of print for many years and extremely expensive if you could actually find a used copy for sale, it is now available from Wiley Investment Classics in a reasonably priced paperback edition. Full disclosure: the foreword was written by yours truly as a labor of love; my total compensation consisted of a few complimentary copies.

Copyright © 2006, William J. Bernstein. All rights reserved.

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