In today’s video, we will discuss about Value Averaging.
You see, while we expect our money to grow at x% every year, the returns are never linear.
This basically means that while I want to achieve x% returns every year, year after year - on some years it can be x-5% and in some years it can end up x+6%
The beauty about SIPs is that over time, it actually allows you to ensure that even if you do nothing, you accumulate more units for the same amount of money making you wealthier in the long run.
(Of course, with the assumption that markets continue to keep going up)
But is it that simple?
Well, value averaging is actually defined by three principles:
Have a defined time frame in mind based on the goal / objective
Have a target rate of return defined
Finally, have defined intervals to assess and measure the performance
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