Imagine you had set aside $10,000 in January 2019 — and put every dollar into Tesla. No second-guessing, no stop-losses. Just buy and hold.
By May 2026, that $10,000 would have grown to roughly $212,913. That is a 21× return in seven years — a result most professional fund managers will never come close to matching in a career.
But here is the honest part: the ride was brutal. Tesla lost nearly half its value in the first three months of 2019 alone. It crashed again in early 2020 during COVID. Then, just when everyone felt comfortable after the 2021 rally, it fell more than 70% through 2022. Holding on through all of that required either extraordinary conviction — or a good strategy that made the discipline automatic.
Going 100% into any single company is not a strategy most people can actually live with — especially during a 73% drawdown. A more realistic approach is to split your money between two stocks that behave differently, and let a set of rules handle when to buy more and when to trim.
The question then becomes: which second stock? The choice matters enormously. A bad diversifier can drag your returns without giving you anything in return. A good one — one that moves differently to Tesla — can actually improve your returns, not just reduce your risk.
We tested two candidates: Broadcom (AVGO) and AngloGold Ashanti (AU). They were chosen for completely different reasons.
Tesla clearing the bar as a value investment in 2019 was a necessary condition — not a sufficient one. A company worth owning long-term is only half the puzzle. The other half is entry: when you buy, how much you deploy, and what happens to your conviction the moment the stock falls 40%.
This is the core problem of market timing — and it is not a problem of intelligence. Even investors who correctly identify a great business routinely destroy their own returns by buying too much at peaks, selling too early during drawdowns, or simply running out of patience before the thesis plays out.
The lump-sum Tesla investor in January 2019 was down 25% by March. They were down again in March 2020. And again — massively — through all of 2022. At each of those moments, the correct move was to buy more. Very few did. The information was available. The nerve was not.
This is exactly what VAA with internal rebalancing solves. A company that qualifies under value investing principles — durable moat, long-term growth, reasonable entry — already satisfies the "what." VAA removes the "when" from the equation entirely. The rules force you to buy more when it hurts most — automatically, without discretion.
The honest framing: VAA does not replace stock selection — it amplifies it. A mediocre business run through VAA will still underperform. The strategy only works because Tesla was genuinely worth owning over a 7-year horizon. What VAA adds is mechanical robustness — an algorithm that never panics, never overtrades, and never misses the months that matter most. The investor's job is to pick the right business. The strategy's job is to eliminate the timing risk of owning it.
Higher return asset gets more weight. Our formula automatically gives more of your money to whichever of the two stocks has performed better recently. The underperformer gets a smaller slice — enough to do its job as a ballast, but not so much it drags the whole portfolio.
More volatile stocks earn a bigger role. Counterintuitively, we want the diversifier to swing a lot. Every time it swings far from Tesla, it creates a chance to rebalance — sell the winner, buy the loser at a discount. The bigger the swings, the bigger that harvesting opportunity.
Correlation is the key. When two stocks move together, there is nothing to harvest. AU and TSLA frequently move in opposite directions — that gap is where the extra return comes from. AVGO moves more similarly to Tesla, but its raw strength as a performer makes it useful in a different way.
The full methodology. The exact formula, parameter rules, and rebalancing conditions are documented in the strategy guide. If you want to understand what fires each monthly decision — or run your own numbers — the complete VAA playbook is here →
Value Averaging Accumulation (VAA): Instead of investing a fixed amount every month regardless of price, VAA sets a target for what your portfolio should be worth each month. The target grows by $500 per month. If your portfolio falls short of the target — because the stock dropped — you invest the exact difference to catch up. If the portfolio is already above target, you do nothing and keep your cash. This means you automatically buy more when prices are low and hold back when prices are high.
Internal Rebalancing: When one stock in the pair drifts more than 10% away from its target weight, the strategy sells a little of the winner and uses that money to buy more of the laggard — entirely within the portfolio, with no extra cash from you. There is one guard: if the winner is above its 12-month average price (a sign it is still in a strong uptrend), the trim is skipped for that month so you do not cut a winner short.
The combined effect: VAA buys more Tesla when it crashes. Rebalancing automatically shifts money into whichever of the two stocks is lagging. Together, they create a mechanical discipline that does what most investors find emotionally impossible — buying aggressively during the bad months.
Lump sums: value ÷ $10,000 | VAA strategies: value ÷ cash actually deployed that month | All prices are total return (yfinance auto_adjust=True): AVGO and AU figures include dividends reinvested | Chart curves are proportionally rescaled from simulation endpoints; exact monthly paths require running the notebook
| Strategy | Cash deployed | Final value | Return | Per year |
|---|---|---|---|---|
| Lump Sum — Tesla only | $10,000 | $212,913 | 21.3× | 51.8% |
| Lump Sum — Broadcom only | $10,000 | $201,447 | 20.1× | 50.6% |
| Lump Sum — AngloGold only | $10,000 | $80,735 | 8.1× | 33.0% |
| VAA — Tesla + Broadcomsystematic | $9,242 (of $10k) | $255,726 | 27.7× | 57.3% |
| VAA — Tesla + AngloGoldsystematic | $8,348 (of $10k) | $106,092 | 12.7× | 41.5% |
A simple lump-sum in Tesla produced extraordinary results — but it demanded iron nerves through a 73% drawdown and left no room to buy more during the crash. The systematic VAA approach, pairing Tesla with Broadcom and letting a fixed set of rules decide when to invest and rebalance, delivered a higher return on the cash actually used — and did it by following a repeatable process rather than requiring any market timing. The gold miner pairing, while less profitable in this specific period, offered genuine crash protection and still matched the lump-sum Tesla result, with $2,800 left undeployed.
One caveat: these results rely on estimated historical prices and the benefit of hindsight. The strategy rules are mechanical and would have required real discipline — particularly during the months when Tesla was down 50% and every instinct said to stop investing. The numbers work because the rules forced buying at exactly those moments.
For informational and educational purposes only. Not financial advice. All figures are based on dividend-adjusted total-return prices sourced from yfinance (auto_adjust=True). Intermediate monthly values interpolated from key anchor points; Sep 2025 – May 2026 approxted). TSLA: split-adjusted for 5-for-1 (Aug 2020) and 3-for-1 (Aug 2022). AVGO: split-adjusted for 10-for-1 (Jul 2024) with backward dividend adjustment applied. AU: no splits in period. Dividends, transaction costs, and taxes are not modelled. Past performance does not guarantee future results. Consult a qualified financial adviser before making investment decisions.
yfinance,
pandas,
numpy and
matplotlib.
All summary figures shown in this presentation are taken directly from the
notebook's stored output — they are not estimates.