What Does it Mean? An investing strategy that works like rupee cost averaging (RCA) in terms of steady monthly contributions, but differs in its approach to the amount of each monthly contribution. In value averaging, the investor sets a target growth rate or amount on his or her asset base or portfolio each month, and then adjusts the next month's contribution according to the relative gain or shortfall made on the original asset base.
For example, suppose an account has a value of Rs.2,000 and the goal is for the portfolio to increase by Rs.200 every month. If, in a month's time, the assets have grown to Rs.2,024, the investor would fund the account with Rs.176 (Rs.200 - Rs.24) worth of assets...
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