What is the difference between dollar cost averaging and value averaging?

Hello!

Dollar Cost Averaging

is when you invest the same amount of money at standard intevals, regardless of share price. By doing so, it is likely that you will buy more shares when the prices are lower and fewer shares when the prices are high. Thus, in the long run, it is likely that it will help you to smoothen out the average purchase price of your shares.

Value Averaging

On the other hand, value avergaing invloes changing how much you invest periodically. For value avergaing, you start with the end goal in mind and work toward your target number.

In conclusion, for DCA, you are always contributing the same amount of money so you buy shares regardless of the price. While for value investing, you will buy when the shares are lower.

Dollar cost averaging means investing the same amount each time

Value averaging means buying more when prices fall and buying less or even withdrawing when markets are high.

https://en.m.wikipedia.org/wiki/Value_averaging