Immediate purchase or spread over time?

47 posts / 0 new
Last post
music.richard's picture
music.richard
Status: Member (Offline)
Joined: Sep 11 2012
Posts: 1
Immediate purchase or spread over time?

Hi to all on the site.

I recently realized the impending global impact of peak oil. I have a modest lump sum to invest in physical gold and my question is; Should I spread the purchase over 6-12 months to protect myself against short term fluctuations in the market? Or given that the US Fed is now printing money monthly, and the possible euro collapse would people advise on getting my money into gold asap

After doing a lot of research I'm begin to settle on using Hard Asset Alliance so that initially they can store my bullion for me and then I can take quick delivery when it appears that things are beginning to go South. Again I'd appreciate any thoughts/experience anyone has on this. 

Best,

Richard

sand_puppy's picture
sand_puppy
Status: Diamond Member (Offline)
Joined: Apr 13 2011
Posts: 1763
Spread out purchases, but start promptly

Good morning Richard,

The technique that seemed best for me was to spread out the purchases over time.  The price of gold does fluctuate quite a bit so spreading out the purchases helps even that out. 

But the biggest problem would be to not get the purchases made.  So, I'd start promptly:  Something like 25% now, then 10% each month.

That is just a pace of purchasing that feels comfortable to me.  As the packages arrived and I started to trust the seller more, I felt less anxious about the purchase.  Continued reading kept confirming the wisdom of this strategy, but it took time to grow on me and to come to feel confident in PM ownership.

Best wishes,

Sand_puppy

suesullivan's picture
suesullivan
Status: Gold Member (Offline)
Joined: Oct 6 2008
Posts: 305
Seconding Sand_puppy's reccs,

Seconding Sand_puppy's reccs, with a notation that gold is moving into the strongest part of its annual cycle, so be sure to leave money to purchase a fair share in late spring and summer of next year, when it weakens.

Jbarney's picture
Jbarney
Status: Silver Member (Offline)
Joined: Nov 25 2010
Posts: 233
Get some physical

Hi,

Get some physical now, with 15-25% of your available money.  You may also want to consider silver, as that has some upside as well.  Then stretch the purchases out over a few months or a defined amount of time.  Don't watch too closely, as your time can be used on other preps.  Just make the purchase, move on, then make another purchase.

 

JB

Dogs_In_A_Pile's picture
Dogs_In_A_Pile
Status: Martenson Brigade Member (Offline)
Joined: Jan 4 2009
Posts: 2606
Another perspective....

I typically buy in the March-April time frame when the big charts tell me too.  There have been a few exceptions - I waited until late October in 2008.  Got smacked a bit with the March buy in 2012, the charts did look like they were bottomed/bottoming, but as we all know, there was a better price to be had.

Never dollar-cost average.  Especially when you already know that gold has a fairly well repeated high-low cycle year over year.

http://www.kitco.com/charts/historicalgold.html

kmaher's picture
kmaher
Status: Bronze Member (Offline)
Joined: Feb 5 2009
Posts: 82
If this sum of money is not a

If this sum of money is not a short term investment and you are convinced this is what you want to do, just do it.  Does it matter if the price might drop $100- $200 and you had a chance to get it a bit cheaper?  Or would it be harder to buy later if the market jumps the same amount.  If it's the right thing, do it and then forget it for a few years.  I think you'll be pleased.  I also would suggest that you just by physical and store it for yourself.  Why mess with another intermediary?

                                          My two cents,

                                                   Kevin

tonypee's picture
tonypee
Status: Member (Offline)
Joined: Mar 12 2012
Posts: 10
Agree w/ Kevin

If its a long term purchase, buy you main holding then add to it. Your buying piece of mind.

ao's picture
ao
Status: Diamond Member (Offline)
Joined: Feb 4 2009
Posts: 2220
I agree with Dogs
Dogs_In_A_Pile wrote:

I typically buy in the March-April time frame when the big charts tell me too.  There have been a few exceptions - I waited until late October in 2008.  Got smacked a bit with the March buy in 2012, the charts did look like they were bottomed/bottoming, but as we all know, there was a better price to be had.

Never dollar-cost average.  Especially when you already know that gold has a fairly well repeated high-low cycle year over year.

http://www.kitco.com/charts/historicalgold.html

Listen to Dogs.  The man knows what he's talking about.  I also wouldn't dollar cost average.  I would, however, aquaint myself with the stereotypical long term and short term market trends of gold and buy accordingly.  I never give up any price advantage that I don't have to.

 

sand_puppy's picture
sand_puppy
Status: Diamond Member (Offline)
Joined: Apr 13 2011
Posts: 1763
Gold Price During an Unstable Time

Dogs and AO:  Do you feel that the gold price will follow the customary annual cyclic pattern THIS year?   With the global situation edging towards gross instability, I feel some urgency to get a major percentage of my savings into precious metal promptly.

sand_puppy

Dogs_In_A_Pile's picture
Dogs_In_A_Pile
Status: Martenson Brigade Member (Offline)
Joined: Jan 4 2009
Posts: 2606
Expectation

sand_puppy -

If you look at yearly charts for the past decade there is every reason to EXPECT a pullback sometime in October which could give a good opportunity to buy.  I'm keeping an eye on the entire market now - if it doesn't melt down in October, it should take off at the end of the month.  I'd look to see gold pull back if the market strengthens and rises.  So far, indicators are setting up and matching expectations, but it hasn't started yet.

It may only be a $50-100 pullback, but that's good enough.  Especially if you are buying gold because it has never been worth zero rather than buying because you need it to go up in value.

kmaher's picture
kmaher
Status: Bronze Member (Offline)
Joined: Feb 5 2009
Posts: 82
If somebody already has a

If somebody already has a significant amount of physical then I think it makes sense to finesse future purchases.  If not, I say establish your position immediately.  My take on gold looking at the charts of other rallies among many other commodities, is that we are poised for an explosive move.  Many of these moves have doubled the price of a commodity in roughly 8 weeks.  We may not be starting for another 6 months or we could be starting soon.  As I write this Gold has surprised me and jumped to a new high for this move, just below the highs for the year.  What's to stop a move to all time highs after that is cleared?

     When these moves start they are hard to believe and very hard to buy into.  Would you be comfortable buying in at an all time high?  Or would you want to be "reasonable" with your first purchase and wait for a pull back.  You may not get one.  This is a bull market and the largest moves will be to the upside and we haven't started to see them yet.

     Trading off seasonals can work, but sometimes it doesn't.  The march/april window may be a low period, but who's to say that we can't run up a few hundred dollars before then?  The end of the year is often strong as well.  October is often a bit weak, but not always.  The physical market is miniscule in relation to the paper financial wealth out there.  Get what you can to protect yourself and then forget it.  Play with the timing when you add to your position.

                    Best of luck, 

                                      Kevin

Jim H's picture
Jim H
Status: Diamond Member (Offline)
Joined: Jun 8 2009
Posts: 2379
Buy now..

As one who got his hands on as much free cash as I could and made my single biggest purchase all at once in 2009, I say buy most of it right now...  we have QE3 to infinity unleashed, and the Gold (and Silver) price is literally chomping at the banking cartel's manipulation bit... pushing hard to go higher.  There is no rational reason to believe Gold and Silver will ever be cheaper than today given what we can see ahead - we are in year 11 of the continuous bull market... and don't suggest to me that that is a long in the tooth bull, since we are at the tail end of a 30 year treasury bull market.  I am not saying that Gold and Silver could not take a 10% hit in price at any time... they can, and they probably will again in the future... what I am saying is that the possibility is great that we get a next big move any time now, and that it could be a pretty big one.  Establish the position now while we have good general availability and we still have a price well below the 2011 high.  I continue to invest about 50:50 on a dollar basis Silver:Gold.  I bought more of each last week.  I will still be buying when a quarter oz. of Gold is $1000... as I get more of the green paper, it will go right out the door.  See what Rick Rule predicts below...          

http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2012/10/4_Rick_Rule_-_The_Availability_Of_Physical_Gold_Will_Disappear.html

Rule had this to say regarding gold:  “In this environment, all financial assets, including gold, will be very volatile, but gold will do well because the value of currencies will continue to erode.  If you look at history, gold does very well in troubled times.

I continue to believe that investors should hold a significant portion of their liquid assets in gold.  Gold is a store of value, it’s a currency, and it will continue to outperform fiat paper currencies around the world over time.  This is what sets gold apart from other ways to store your ongoing or your transactional wealth.

It’s interesting that gold is still a relatively under-owned asset.  At some point we will see the availability of physical gold disappear when we begin to see widespread public ownership like we witnessed in the 1970s.”

kmaher's picture
kmaher
Status: Bronze Member (Offline)
Joined: Feb 5 2009
Posts: 82
One thing Chris explained so

One thing Chris explained so well in the Crash Course was how things "speed up" when you are dealing with exponential growth.  It feels like that hasn't kicked into high gear yet, but It will at some point.  I don't think we can know when that point is, but as Chris says, I'd rather be a year early than a day late.

     I think if we are going to see a slam on the metals, tomorrow would be a good time for it.  If not, I think we'll run to 1850-70 before we might pull back a bit before new highs.  My formative experience with runaway markets was with copper and I do believe we could be setting up for something similar with gold and silver.

     In the time captured by this chart, the move up in copper seemed extreme and everybody seemed to be waiting for the market to collapse.

but as you'll see in the next chart, the market would nearly double in less than two months.  I've marked the chart with a vertical line to mark the end of the first chart and to give a sense of scale to the next move.

So I'm in the camp of making sure you have exposure.  These moves would be hard to buy into.  I also tend to be like Jim and jump in all at once and I'm often early.

                                                                        Kevin

kmaher's picture
kmaher
Status: Bronze Member (Offline)
Joined: Feb 5 2009
Posts: 82
Sorry the charts didn't load,

Sorry the charts didn't load, not sure why.  Maybe too much data for a comment?

                                        Kevin

kmaher's picture
kmaher
Status: Bronze Member (Offline)
Joined: Feb 5 2009
Posts: 82
(No subject)

 

 

 

 

ao's picture
ao
Status: Diamond Member (Offline)
Joined: Feb 4 2009
Posts: 2220
buy soon but not now
Jim H wrote:

As one who got his hands on as much free cash as I could and made my single biggest purchase all at once in 2009, I say buy most of it right now...  we have QE3 to infinity unleashed, and the Gold (and Silver) price is literally chomping at the banking cartel's manipulation bit... pushing hard to go higher. 

Sorry Jim but I have to disagree.  As one who made my largest single purchase in 2001 and can comfortably retire on that alone now if I'd choose, I'd say ... DON"T buy it right now.  Never, never, never, never, never  ... did I say NEVER ... never buy at a peak price such as where gold is at tonight.  Buy soon, but don't buy now.  You won't miss the boat and it will pull back somewhat from 1795 ... before going higher.  But it will go lower, by at least 10 and that's 10 per ounce in your pocket, not someone else's. 

Jim's got gold fever.;-)  

kmaher's picture
kmaher
Status: Bronze Member (Offline)
Joined: Feb 5 2009
Posts: 82
AO,   Would you really

AO,

   Would you really counsel somebody who has yet to acquire any gold to wait because they might get it $10 cheaper?  Or do you think we are guaranteed to have a %10 pullback? 

    It seems to me, it's important to get some exposure, because it will go higher in time as you say.

                                                           Kevin

ao's picture
ao
Status: Diamond Member (Offline)
Joined: Feb 4 2009
Posts: 2220
it's all happened before, it'll happen again
kmaher wrote:

AO,

   Would you really counsel somebody who has yet to acquire any gold to wait because they might get it $10 cheaper?  Or do you think we are guaranteed to have a %10 pullback? 

    It seems to me, it's important to get some exposure, because it will go higher in time as you say.

                                                           Kevin

Yes, I would.  Those who panic in situations that don't merit panic will always get taken to the cleaners.  Do you really believe gold will stay at $1795 with NO pullback below that level?

Act now!

Limited time only!!

Quantities limited!!!

Call now before it's too late!!!!

This type of urgency marketing has duped millions since time immemorial.  Do we really want to be participants in seeing yet another person duped?

 

Jim H's picture
Jim H
Status: Diamond Member (Offline)
Joined: Jun 8 2009
Posts: 2379
AO...

My concern with your advice is that, if you are wrong, and Gold does not in fact take a breather here, but rather takes a big step up which never gets retraced... then our friend may never get in the game because the price is just too "high".  I think maybe the difference between my outlook and yours is that I sincerely believe that there will be, at some point in the not to distant future, a significant step-function change in the price of Gold relating to the market's realization that there is not in fact as much Gold as we think there is... i.e. that the leased Gold, the unallocated Gold, and the fractionally reserved ETF's have all been part of an intricate ponzi scheme attracting people's "Gold" investments into paper facsimiles.  I don't know when this will happen.. but anything you buy now on the front side of this transition will be very well bought indeed.

Respect where respect is due;  you have made some very good calls on Gold price movements in the past.  I think for now though you are preaching a form of pennywise....   

Jim H's picture
Jim H
Status: Diamond Member (Offline)
Joined: Jun 8 2009
Posts: 2379
Here comes your Gold pullback... on the made-up jobs numbers...

How about now? 

SailAway's picture
SailAway
Status: Gold Member (Offline)
Joined: Aug 11 2010
Posts: 404
Re: How about now?
Jim H wrote:

How about now? 

Just did. Bought some PSLV, PHYS & GDXJ this morning.

 

Thanks Jim, always enjoy your posts.

Fred

 

 

ao's picture
ao
Status: Diamond Member (Offline)
Joined: Feb 4 2009
Posts: 2220
attention to details that matter
Jim H wrote:

How about now? 

Better, definitely.  And, Jim, being pennywise in such matters adds up over time, big time, as I'm sure you know.  I don't think you and I are that different philosophically on the gold issue but the big, substantial, more enduring movements come with major changes in confidence which I don't see happening yet.  All the various fundamental and technical analyses are useful but psychology, emotions, and sentiment trump all.  I have my own ways of keeping a finger on the pulse of those things and I don't see any explosive movement occurring ... yet.

ao's picture
ao
Status: Diamond Member (Offline)
Joined: Feb 4 2009
Posts: 2220
may not happen
music.richard wrote:

After doing a lot of research I'm begin to settle on using Hard Asset Alliance so that initially they can store my bullion for me and then I can take quick delivery when it appears that things are beginning to go South.

Don't count on quick delivery when things are beginning to go South.  Ever try to line up an armored car delivery in a pinch situation?  It doesn't happen quickly.  And if you have a smaller amount of PMs, I wouldn't count on PMs necessarily getting through without being pilfered.  Delivery people understand that the most common high density items are ammunition or PMs. 

jdye51's picture
jdye51
Status: Silver Member (Offline)
Joined: Feb 16 2011
Posts: 157
Gold as currency

I understand that this discussion is about investing in gold and I defer to those who are knowledgable about that. But there are those of us who are not as focused on investing as much as having gold/silver to use as currency when the dollar fails/bank holidays etc. So, while my husband and I have invested in gold ETFs and mining stock, we also have physical gold and silver on hand should we need it to pay for basic survival needs. Perhaps you might start with some physical gold (and silver which is more affordable) in your possession and then as the market indicates, start investing. It might give you peace of mind to have an immediate stash should things take a major turn for the worse before you are able to invest. We purchased ours from a local coin shop and have established a relationship with the owner. We also have an amount of cash on hand as well just to cover our bases. Next - raised beds!

ao's picture
ao
Status: Diamond Member (Offline)
Joined: Feb 4 2009
Posts: 2220
gold sucks as an investment
jdye51 wrote:

I understand that this discussion is about investing in gold and I defer to those who are knowledgable about that. But there are those of us who are not as focused on investing as much as having gold/silver to use as currency when the dollar fails/bank holidays etc. So, while my husband and I have invested in gold ETFs and mining stock, we also have physical gold and silver on hand should we need it to pay for basic survival needs. Perhaps you might start with some physical gold (and silver which is more affordable) in your possession and then as the market indicates, start investing. It might give you peace of mind to have an immediate stash should things take a major turn for the worse before you are able to invest. We purchased ours from a local coin shop and have established a relationship with the owner. We also have an amount of cash on hand as well just to cover our bases. Next - raised beds!

Actually, for myself and I suspect for many others, it's not as much about investing in gold as it is about saving my a** from the ravages of a government gone wild.  Gold is just hanging on to what you have, not making big bucks. 

Also, gold won't be very good currency in the above situation.  As has been stated here many, many times previously, gold is about preserving wealth until the smoke clears, not necessarily exchanging wealth on a day to day basis during a crisis.  That's silver's job as well as the job of practical barter items.  Plus, with your stash of cash, make sure you have plenty of 1s, 5s, and 10s and not just 20s, 50s, and 100s.  If banking holidays and similar cash crunches occur, you're going to want smaller denomination bills.  You won't find a ready means for obtaining "change" for the large denominations and you'll find yourself overspending for necessities out of desperation.

 

 

ao's picture
ao
Status: Diamond Member (Offline)
Joined: Feb 4 2009
Posts: 2220
I rest my case
kmaher wrote:

AO,

   Would you really counsel somebody who has yet to acquire any gold to wait because they might get it $10 cheaper?  Or do you think we are guaranteed to have a %10 pullback? 

    It seems to me, it's important to get some exposure, because it will go higher in time as you say.

                                                           Kevin

I rest my case.

t24_au_en_usoz_2.gif

Piece of cake to save at least $15/oz.  And if $15/oz. doesn't matter to you, please send it to me.  I'll be glad to take that nasty germ and coke laden paper off your hands.;-)

jdye51's picture
jdye51
Status: Silver Member (Offline)
Joined: Feb 16 2011
Posts: 157
thanks ao

We have more physical silver than gold due to its affordability. Good tip about the cash.

Does anyone really know what will happen though? Seems to me we make guesses and hope we are correct. I suspect being alert, flexible, and adaptable is the key rather than any particular plan, as different scenarios are projected by different people. We try to make common sense decisions as best we can in a complex and frightening world. Best of luck to all.

Grover's picture
Grover
Status: Platinum Member (Offline)
Joined: Feb 16 2011
Posts: 800
It depends on your situation
ao wrote:

Piece of cake to save at least $15/oz.  And if $15/oz. doesn't matter to you, please send it to me.  I'll be glad to take that nasty germ and coke laden paper off your hands.;-)

ao,

I agree that it is better to get it cheaper. Unfortunately, the unknowns (and reactions once revealed) overwhelm rational thought. We are all speculators in this environment, so we need to step back and look at the consequences of decisions. If we can assess risk levels, we can then weigh the likelihood of events passing (or not) and act accordingly.

When I read Richard's original post on this thread, I got the feeling that he hasn't purchased any metal yet. If you were in his shoes, would you still advocate holding off a few weeks in hopes that the price will come down another percent or more? What if some event occurs that makes the price skyrocket? I see trouble in Iran escalating, the Euro crisis is deepening, Asia is entering a recession, and the US still hasn't established a recovery from the the "Great Recession." There is apparent coordinated efforts by all central bankers to cheapen their currencies so they can remain competitive on the world stage. Which one(s) is/are going to pop and what will the reaction be?

On the other hand, the economy isn't getting much worse on the surface, the stock market is within a few percent of all time nominal highs, the official unemployment rate was recently downgraded, and mortgage rates are at record lows. The uninformed majority wants to hope that the crisis is over and things are under control. If so, precious metals will be abandoned (and subsequently shorted) by the market makers.

So, what do you do if you are underweight in PMs? There is no way to know for sure what will happen. I think we all know what will happen in the longer term when the things we discuss on this site become common knowledge. To me, the biggest risk is being trapped in federal reserve notes. Once an initial position has been established, then wait for the pullbacks and expand your positions.

On a personal note, I was planning to buy some more junk silver this summer. The price came within 3 cents an ounce of my buy target in mid July. The price started going up in late July and I debated whether or not to buy some any ways. I decided not to because the federal reserve didn't signal to the markets during their June meeting that QE3 was coming. With the elections on the horizon, I reasoned that they couldn't pull the trigger before the December meeting. Besides, the big banks were recording record profits and had at least a $trillion in reserve. On top of it, I reasoned that the German CB wouldn't allow the ECB to bail out the club Med countries. Silly me! Now, the silver price is over 20% higher than it was when I decided to let it roll.

It is one thing to be adding a few percent to an established position. It is quite another if this is the first installment.

Grover

cleelumcoin's picture
cleelumcoin
Status: Member (Offline)
Joined: Dec 23 2011
Posts: 2
If you are new to the market....

As I was in 2002, I started on a disclipined monthly acquisition program with silver. I believed then this was a beginning of a long bull run. As I learned how this market works, I learned about the g/s ratio and swapping. So I added this into the mix. Then as I learned about seasonal fluctuations I started to purchase at dips while still maintaining my small monthly program. Sure I took a loss sometimes, but, overall I am still way way ahead. I've even financed some significant house upgrades during this time with some of my early profits. And I am still way ahead.

I am now firmly in both silver and gold. With the swapping I keep adding to my total net bullion holdings. When I have a little extra, say a bonus from work, I'll add to my holdings but still try to keep cash on hand for time when we see the dips. And the dips do occur :)

my two cents. A-

Idaho1's picture
Idaho1
Status: Member (Offline)
Joined: Aug 4 2012
Posts: 2
buy now or later

Go back an look at the price action over the last 10 years. All of those little bumps up and down did not really mean a hill of beans in the big picture. I am in the same boat this month and will be all in. I would really be pissed at my self if I waited for a correction and it went the other way. It is very hard to buy after a large run up. We have been in the dulldrums for a year and a half now more or less. This last little rise is nothing compared to what is coming next.. Could be next March or could be tomorrow.. Get in and dont look back

ao's picture
ao
Status: Diamond Member (Offline)
Joined: Feb 4 2009
Posts: 2220
some evidence
Grover wrote:
ao wrote:

Piece of cake to save at least $15/oz.  And if $15/oz. doesn't matter to you, please send it to me.  I'll be glad to take that nasty germ and coke laden paper off your hands.;-)

ao,

I agree that it is better to get it cheaper. Unfortunately, the unknowns (and reactions once revealed) overwhelm rational thought. We are all speculators in this environment, so we need to step back and look at the consequences of decisions. If we can assess risk levels, we can then weigh the likelihood of events passing (or not) and act accordingly.

When I read Richard's original post on this thread, I got the feeling that he hasn't purchased any metal yet. If you were in his shoes, would you still advocate holding off a few weeks in hopes that the price will come down another percent or more?

Grover,

I hear what you're saying but, in my opinion, all factors and risks considered, buying then seemed unwise ... and it would have been.  Also, I didn't say hold off a few weeks.  I said don't buy when gold is peaking.  In terms of assessing risk levels, the chance that gold would go ballistic from that 1795 point and STAY UP were very small based on my appraisal of the situation and the ongoing suppression that has been called into play again and again and again.  Iran has seemingly been escalating for years but that uncertainty has been factored in.  Ditto with the Euro crisis and the other problems.  Highly significant events in all these areas have barely caused a blip on the gold screen.  The Fed WILL NOT let it explode upward uncontrollable and stay there before the election and maybe not afterwards.  Ditto with central bank action elsewhere.

As one example, here's what happened to gold on 9/11/01.  One month later, how much of an impact did it leave?  I'd say 9/11 was about as significant as you can get and yet the impact was minimal.  

ausep01.gif

 

auoct01.gif   

 

As another example, here's the market crash in September 2008.  Again, note minimal residual effect a month later.

ausep08.gif

auoct08.gif

 

In short, historically, it's always been unwise to react rather than think.  Rashness rarely puts money in someone's pocket but it often empties them.  And today, we saw nice buying opportunities below the 1770 level.  As I said above, I rest my case.

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Login or Register to post comments