I believe it means the same thing but only using different terms.

DVA = Dollar Value Averaging
VCA = Value Cost Averaging

Anyway to get down to business, there are different versions of DVA or VCA. One version was introduced by Jason Kelly in his book entitled “The 3% Signal” which was published in February 2015. In summary, the idea is:-

(a) an 80/20 target allocation between a growth stock and bond funds;
(b) a 30 percent bond allocation threshold that triggers rebalancing back to 80/20;
© a quarterly timing schedule; and
(d) a 3 percent growth target.

The key here is the 3% signal. At the end of each quarter you rebalance based on how much your stock fund grew or didn’t—more than 3%, sell the extra profits and put them into your bond fund; less than 3%, use bond proceeds to bring your stock fund up to its target 3% quarterly growth rate.

The author’s research indicates that 3% per quarter is the outperformance sweet spot. This quarterly performance yields an annual return of 12.6%, 26% better than the market’s annual performance of 10% over the past ninety years. Of course this study is based on the US stock market.

See, I have read and summarized a 336 pages book for you and saved you the trouble of spending RM60.00 to buy it.
Please buy me one teh tarik.

Note : For serious investors only, you may consider reading the book written by Michael E. Edleson entitled “Value Averaging : The Safe and Easy Strategy for Higher Investment Returns”. He is the Harvard University professor who actually created DVA/VCA.

Eh no-lah bro. I read the book last week. Then I just cut and paste the important review section on the book and put it here. Saves me the time of re-typing it.

But thanks for the beer!

This post has been edited by Vanguard 2015: Apr 8 2015, 04:37 PM

Yes you are right. Both my China linked funds jumped a few % up overnight. Is it sustainable? I don't know. Should we go crazy and invest a huge lump sum into China funds now?

I am going to top up my China funds but to cap it maximum 15% of my total portfolio. The other Asian funds in my portfolio are already exposed to China funds. So the total exposure to the China markets will be more than 15%.

See you in Beijing Mr. Looi!

This post has been edited by Vanguard 2015: Apr 10 2015, 10:01 AM

Is greed good?

I suppose it depends on the amount we are investing and our risk tolerance. My view is that the larger amount we invest, the more diversification we require. There is a difference in asset allocation if we are investing RM20K or RM200K.

Therefore assuming 20% of the your total portfolio is 10K and if the China Market goes south, are you prepared to sustain a paper loss of 30% for a few years? Don’t laugh, this was exactly what happened to PB China Pacific Equity Fund when it was launched a few years ago.

This means your China fund investment of RM10K will be reduced to RM7K with a 30% paper loss. If we lose 30% of our investment, the fund will have to GAIN 43% just to break even back to RM10K. This may take a few years if we don’t practice DCA or Value Averaging once we suffer the loss.

But please don’t take my words for it. I am not an expert in unit trusts. There are a lot of other sifus in this thread. Please analyse the above datas yourself and decide on your own risk tolerance level. After all, it is your hard earned money.

At the end of the day, it is all about asset allocation. If we suffer 30% loss on 20% of our portfolio, hopefully our other 80% asset allocation in the portfolio is making money to minimise the losses.

Happy Investing!

This post has been edited by Vanguard 2015: Apr 10 2015, 11:14 AM

You are welcome bro. Happy, happy. Everyone make money.

Practise asset allocation, asset allocation and asset allocation.

Invest for the long run and do quarterly portfolio rebalancing. Follow the 3% signal principle.

At the same time, go for it for your supplementary portfolio.....CHINA, JAPAN, GO, GO, GO.

This post has been edited by Vanguard 2015: Apr 10 2015, 06:28 PM

I was at the FSM seminar this morning. I think it is quite helpful for average investors like me. I will maintain Ponzi 2 as part of my core portfolio because the CIMB speaker said:-

1. It has zero exposure to the Malaysian market;
2. It only invest in China H shares and not the China A shares for the China market. The China A shares are running high.
3. 80% to 90% of Ponzi 2 are in large cap stocks
4. The fund size of RM2.2 billion is still considered small by US standard. Therefore there is no liquidity issue.
5. Ponzi 2 offers not only country diversification but currency diversification as well.

- End of Report for Ponzi 2 -

This post has been edited by Vanguard 2015: Apr 11 2015, 06:16 PM

The Kenanga speaker said that their year end prediction for KLCI is 1847 points.

I am holdling on to my KGF and EISC unit trusts which I bought heavily into in Dec 2014/January 2015 after the market correction.

Speaker is bullish on Japan but cautious on the China A shares. Some analysts are predicting a 10% market correction for A shares. But you know how predictions are...

Note : Ponzi 2 has zero exposure to the Japan market.

This post has been edited by Vanguard 2015: Apr 11 2015, 05:57 PM

My game plan after going to the FSM seminar remains unchanged, which is to buy the whole farm.

If the chicken dies, still have the goat. If the goat dies, still have the sheep. If the sheep dies, still have the cow. If the whole farm gets wiped out like in 2008, still got the chicken eggs, i.e. the bond funds and reserve cash.

This post has been edited by Vanguard 2015: Apr 11 2015, 06:10 PM

Nope, the focus now is on China, HK and Japan.

I suspect by December 2015 or earlier, the members here will fall under either one of the following categories:-

(1) Fully invested in China. The market soared. Made a lot of money. Boasting rights of ROI above 20%; OR

(2) Fully invested in China. Got burnt because the market went down. Crying here in the forum asking other members how to recover their money: OR

(3) Not invested in China at all. If the market is still going up, knocking head on the wall and asking, why didn't I jump in? But if the market crashed, will have a big smile on their face with a smug expression, "See, I told you so..."; OR

(4) Practised asset allocation. Only invested up to 20% in China. Have other international funds, bond funds, asia pacific funds, japan fund, REIT funds and bond funds in their portfolio. If the China market crashed, still OK. ROI may be below 10% or just breaking even. Will live to fight another day. On the other hand, if the China market went up, it will be an extra bonus.

So which category will you be in?

This post has been edited by Vanguard 2015: Apr 13 2015, 08:55 AM

Horray. You have won the grand prize.

Good choice. But I suspect if you total up all the investments in your Asia Pacific funds which are invested in China and HK as well, the percentage may be above 10%.

The market has gone crazy. Every single fund house which has China shares in it has spiked. I am not sure whether to be happy or to be alarmed to see the "paper gain" in my portfolio.

Time to overhaul my portfolio and re-group in case China falls.

Not overreacting yet. Just topping up or doing intra trade for CIMB Global Titans, REIT, Japan Growth Fund and TA Global Technology Fund.

I need some "foreign fighters" from other countries to counter China.

I wish I could but I cannot find any funds with substantial market exposure to Mother Russia. Only saw Eastspring Global Emerging Market Funds but it only has 1.54% exposure to Russia. Am I missing something here?

This post has been edited by Vanguard 2015: Apr 13 2015, 07:16 PM

Are you aiming for a ROI of 10%? My RHB OSK China India Growth fund has spiked to 11.09% today within 1 week. Previously I think the ROI was only around 5%? I took some money off the table. Switching it to other funds.

This post has been edited by Vanguard 2015: Apr 13 2015, 07:41 PM

My portfolio is also heavy in Asia. I just do what I can. I am switching a lot of my reserve in the bond funds or intra switching some of my profits in the equity funds to CIMB Global Titans followed by Eastpring Global Emerging Markets Fund, Affin Japan Growth, AmAsia Pacific REITs and then TA Global Technology Fund. My Aberdeen and TA European Fund portfolio remains unchanged.

Although the Eastspring Global Emerging Funds has about 24.80% invested in China/HK, it also has a lot of exposure in South Korea, Taiwan, India and Brazil. Anyway it is house money so I am not so worried.

But you are right, if US crash, the rest of the world will be affected and our whole portfolio will crash. We just have to keep our fingers crossed and hope for the best. Hopefully our bond funds and reserve cash will weather the storm.

I started investing in unit trusts since around 2004/2005 but have not been really active investing for a number of years until recently. Old timers like you would have been in the game longer. Respect for you.

This post has been edited by Vanguard 2015: Apr 13 2015, 07:38 PM

I have posted recently here before about AmPrecious Metals. Please do a search.

My AmPrecious Metals portofolio is still currently down - 8%. Not for the faint hearted.

This post has been edited by Vanguard 2015: Apr 14 2015, 08:39 AM