Does Value Averaging Score Over Rupee Cost Averaging?
Rupee Cost Averaging
Keywords:Net Asset Value; Rupee Cost Averaging; Value Averaging; Systematic Investment Plan; Asset Allocation
Systematic Investment Plan (SIP) has gained immense popularity in India since the last decade. The main reasons behind this popularity have been debarring the commitment of chunk investment and implementation of the auto timing mechanism through Rupee Cost Averaging (RCA). Rupee Cost Averaging yields the benefit by altering the number of units acquired by an investor. The periodical investment amount remains the same. A modified concept of Rupee Cost Averaging is Value Averaging (VA) that shows how periodical investments can be altered to gain more benefits from market fluctuations. The present paper vividly depicts how Value Averaging (VA) plays a dominant role over Rupee Cost Averaging (RCA) as regards Return on Investment (ROI) derived by the investors.
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