Value Averaging: The Safe and Easy Strategy for Higher Investment Returnsby Michael E. Edleson, William J. Bernstein (Foreword by)
Michael Edleson first introduced his concept of value averaging to the world in an article written in 1988. He then wrote a book entitled Value Averaging in 1993, which has been nearly impossible to find—until now. With the reintroduction of Value Averaging, you now have access to a strategy that can help you accumulate wealth, increase your investment returns, and achieve your financial goals.
Meet the Author
Michael E. Edleson is a Managing Director of Morgan Stanley and oversees the firm's equity risk globally. Prior to that, he was Chief Economist of NASDAQ and a finance professor at Harvard Business School. Edleson earned his PhD at MIT.
Includes spreadsheets on a companion Web site: www.wiley.com/go/valueaveraging
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"Value Averaging: The Safe and Easy Strategy for Higher Investment Returns" presents a highly practical and yet ingenious way to improve your investment returns and avoid market pitfalls. It is highly readable, easy to understand, and down-to-earth with numerous examples presented clearly. Written by Michael E. Edleson, with a Ph.D. from MIT, it is very well researched and supported by historical evidence of real markets and Monte Carlo simulations. The book contains straight-forward data tables, which are explained in the text. Value Averaging [VA] is an improvement over Dollar Cost Averaging [DCA], which is also covered in this low-cost, high-value book. The two methods are explained in detail and compared. In most cases, Value Averaging is superior to DCA. VA automatically and predictably forces the wise investor to invest more dollars at market bottoms and low points and less dollars at market highs, sometimes even providing for the investor to take some money out near and at market peaks. VA is mildly complex, yet flexible, and there is more than enough explanation and clarity to help the investor navigate his way to higher returns without difficulty. There are also easy to use mathematical formulas provided to determine the optimal customized amount to invest each month under varying market levevls as time passes. This book is "the missing link" in every good investor's library.
This is flat out the best finance book I've ever read. Value Average investing solves that niggly question of "how much should I be saving?" With this investment style, you will see, point blank, how much you should be setting aside each month to reach your retirement goal. I've used it to set up a retirement plan that will have me sitting on $4-$6 million when I retire, in 30 years, on a single paycheck. Don't believe me? Get the book, read it over the weekend, and grab the free spreadsheet offered online.