Dollar-cost average - or go all in?

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switters's picture
switters
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Dollar-cost average - or go all in?

I already have a substantial portion of my savings in bullion, and I've decided to increase my position.  I know that dollar-cost averaging is generally the best way to do this.  However, it's very hard for me to imagine circumstances in which gold would decrease significantly in the next few months. I'm concerned that if I spread these purchases out over 6 months as is commonly advised, I'll end up buying in at a much higher price.  

I realizing that buying all at once is a risk, but it seems to me that dollar-cost averaging is also a risk in an environment like this.

Thoughts?

Thomas Hedin's picture
Thomas Hedin
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Posts: 815
My thoughts.

My thoughts is you should first define the dollar.

JAG's picture
JAG
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Posts: 2492
Let's Ask Google
switters wrote:

However, it's very hard for me to imagine circumstances in which gold would decrease significantly in the next few months. 

Hey Switters,

I''ll take a stab at this question, but first a little disclosure of bias on my part:

During your absence over the last year or two, I sold my personal bullion into the strong price action that occurred during that period. Basically, I feel that Wall Street has co-opted the trade and is playing the same old game. Enough said.

Now back to your question:

One of the tasks that I regularly perform for my business is search engine research.  And sometimes (when goofing off) I like to get the feel for the popularity of a given investment by seeing how many Google searches there are for keyword phrases related to the investment. For example, if you see a spike in search volume for the keyword phrase stock market crash, it might be a good time to be bullish on the market (from a contrarian investing perspective). 

So let me attempt to answer your question with a question of my own: How many searches for the term "gold price" do you think Google estimated for the last year?

  • A million searches?
  • 2 million searches?
  • 10X that?

How about over 49 million searches over the last year for the term "gold price". To put that number in perspective, yearly search volume for the Apple Computers symbol, AAPL, is estimated at just 12 million. The impression that I get from this data is that gold is a very popular investment these days, maybe too popular. So in my judgement, you are better off taking the more cautious approach with your next round of gold investment.

All the best...Jeff

 

 

Nacci's picture
Nacci
Status: Silver Member (Offline)
Joined: Apr 22 2009
Posts: 194
Plan A.

 Switters, I hear you loud and clear.  I am also looking to add to my holdings.  It is an individual call with no guarantees but you know that. This is what I decided to do.  Chris Martenson has stated that he is also looking for another in, that he is expecting a correction in the market for very specific reasons and that he will let us know when he plans to pull the trigger.  When that word comes I am buying.  That is plan A.  Good luck.  Nacci.

I believe that 1% of those "Gold Price"  Google searches were from me.

ao's picture
ao
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Nacci wrote: Chris Martenson
Nacci wrote:

Chris Martenson has stated that he is also looking for another in, that he is expecting a correction in the market for very specific reasons and that he will let us know when he plans to pull the trigger.  When that word comes I am buying.  That is plan A.  Good luck.  Nacci.

Nacci,

FWIW, by the time he is able to let you know, the opportunity will most likely be past ... these markets are moving sharply and waiting for no one..  

ao's picture
ao
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Posts: 2220
the quick and the dead
JAG wrote:

[One of the tasks that I regularly perform for my business is search engine research.  And sometimes (when goofing off) I like to get the feel for the popularity of a given investment by seeing how many Google searches there are for keyword phrases related to the investment. For example, if you see a spike in search volume for the keyword phrase stock market crash, it might be a good time to be bullish on the market (from a contrarian investing perspective). 

So let me attempt to answer your question with a question of my own: How many searches for the term "gold price" do you think Google estimated for the last year?

  • A million searches?
  • 2 million searches?
  • 10X that?

How about over 49 million searches over the last year for the term "gold price". To put that number in perspective, yearly search volume for the Apple Computers symbol, AAPL, is estimated at just 12 million. The impression that I get from this data is that gold is a very popular investment these days, maybe too popular. So in my judgement, you are better off taking the more cautious approach with your next round of gold investment.

All the best...Jeff

Jeff,

As you know, interest is radically different from participation.  There is great and growing interest but still little participation.  The interested but non-participating crowd has considerable fear related to the buying process and even greater fear related to the selling process.  They're like zebras lined up along the riverbank with no one wanting to be the first to feed the crocodiles.  But once a critical mass plunges in, the whole herd will go for it, crocodiles be damned.  The crocodiles will, of course, have a field day with the tail enders. 

The sheep, on the other hand, are too timid to go in the water in the first place.  The lions will pick them off at their leisure.

And unfortunately, the vultures fly over it all and get a piece of every last one of them in the end.

 

ejordan's picture
ejordan
Status: Member (Offline)
Joined: Nov 19 2010
Posts: 2
Gold is not an investment,

Gold is not an investment, Gold is money. Gold is the vehicle that carries your wealth across the chasm of currency destruction. The Dollar is a dying currency. Why would you not transfer all of your wealth into real money?

The paradigm shift is clear, let go of the conditioning.

Gold is money. The Dollar is currency. Currencies die, and ours is in the middle of it's death right now.

Ignore this at your peril.

JAG's picture
JAG
Status: Diamond Member (Offline)
Joined: Oct 26 2008
Posts: 2492
ejordan wrote: Ignore this
ejordan wrote:

Ignore this at your peril.

My apologies...but this is just too funny. 

And people accuse me of being emotionally invested in my views...LOL

ejordan's picture
ejordan
Status: Member (Offline)
Joined: Nov 19 2010
Posts: 2
When the currency collapsed

When the currency collapsed in Zimbabwe, if people did not have gold to trade for food, they suffered starvation and death.

Cause and effect.

No emotion here, just logic.

 

 

Thomas Hedin's picture
Thomas Hedin
Status: Platinum Member (Offline)
Joined: Jan 28 2009
Posts: 815
Gold is not money

Gold is not money and has not been money for close to 80 years since gold was de-monetized in 1933/34.

If gold truely was money then why would they have had to pass a law to make it money?

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