Nasdaq: Value Averaging For The Long Haul

Nasdaq 16Aug09Have you kicked yourself for having missed the superb rally of the 1990s in Nasdaq? More likely you have kicked yourself for buying stocks on the way down, only to see it go even lower! Ditto for the rally between 2003-2008 and the collapse that followed. What are we poor blighters supposed to do? Precisely when we gather up enough courage to start buying, the market starts its descent. And while we listened to all the fear mongering and did nothing, the market went up. Perhaps the answer lies in value averaging? There is a nice book written by Michael Elseson on this subject, and would you believe it, for some years the book was actually selling for more than its listed price beause it had gone out of print. Anyway, the concept is simply to marry dollar-cost averaging and rebalancing. The Nasdaq index would undoubetdly start its correction sometime in the future. When the correction starts, we should start buying steadily for similar amounts every month. That way, we would be holding a nice portfolio at an average cost somewhere in the middle of the range of the correction. EVentually, when the third wave starts, (or call it “C” wave if you like – it doesn’t matter which if you are looking for higher prices in the medium term), you will be smiling, and remembeing this post in Wavetimes!


  • david


    Not sure i follow you , are you calling a bottom in tech stocks ? Regarding the SPX count i think we are completing a B wave or Primary 2 doesnt really mattter.. entering the final 5 now i reckon. I prefer the notion of P2 and in that instance we are making a classing abc with us about to enter wave 3 of C up of said ABC.

    • Hi David,

      In this specific post, I was suggesting that those who wish to play from the “long” side in Nasdaq stocks should accumulate in stages when we get the eventual correction. The reason is, we will experience a more powerful wave up post the correction. That move could be either a 3rd wave, or a C wave, it doesn’t matter what label we apply at this time. Bear in mind that the correction could be deep, which is another reason why we should accumulate on stages.

  • Shiva

    Hi Sir
    Where do we stand in this correction? Looks like SPY is close to the target you called 1376 and qqq had a solid rally from your last call. Are you updating these when you are back? Thx for all the education


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