Value Averaging

Value averaging is an investment strategy where the investor adjusts the amount invested at each interval to maintain a predetermined growth path for the portfolio's total value, rather than investing a fixed sum every period as in conventional SIPs. If the portfolio's value falls below the target trajectory, the investor buys more; if it exceeds the target, the investor buys less or even sells. While value averaging can theoretically improve returns by systematically buying more during market dips, it requires more active monitoring and cash management compared to the simpler rupee cost averaging approach used in standard mutual fund SIPs.