Systematic Investing Group

[lostcowboy]

Hi leap, The reason to increase the monthly payment is to combat inflation. Mild inflation is 2-3%. The reason to increase the Portfolio Value is to reach your retirement goal. The assumption is that your stock portfolio should increase at a annual rate. the historical rate is about 8-9% a year. If you use Mr Edleson's spreadsheet be sure to use low rates! This will make the monthly payments larger than if you use higher rates. But no one can predict the future, so it is better to pay more now than trying to pay more later in life. The portfolio Value works just like the constant value in a constant dollar plan. Lets say that the stock value drops by 50%, you have to come up with the money to bring the stock value back to the portfolio value. In Mr's Edleson's book he doesn't go into any great detail on how you would come up with this money. He talks of having funds sitting in a money/bond fund. In my version of Value Averaging I took a idea from Mr Lichello's book Super power investing, and put part of the monthly payment into the cash/bond fund.

Finding Edleson's book, The book has been out of print for a long time. http://www.amazon.com/exec/obidos/tg/detail/-/0942641272/qid=1081848367/sr=1-4/ref=sr_1_4/102-917051...
I assume you don't want to buy the book for that price. The way I read the book was through my local public library. They have a program where if they do not have a book they can borrow the book from another library. I think I had to wait about three weeks for the book, it was worth the wait to read it.

Which installment plan do you prefer....value vs. Synchrovest? Good question! Being that I still am not able to invest, I have no real life data. Value Averaging should enable you to meet your retirement goal with maybe some extra left over. Synchrovest may meet your retirement goal, with more profit. I think it depends on the stock or fund you are investing in. If the fund is mostly a growth fund I think Value Averaging may be best. If the fund is mostly cycles in nature Synchrovest may be best. If you have excel, the best thing would be to get the spreadsheets and put the old data from your stock or data in the spreadsheets and compare them.

I still am not totally happy with the way Synchrovest sells its stock, any suggestions on ways to improve it?