never sell your bullion to a dealer for under spot!

DCA is a great tool to force discipline, but it's a horrible tool to justify investing more money into an investment just because you already lost money. It should not be used to justify your purchase, again that is the sunk cost fallacy.

The first order of business is to evaluate any investment and determine what price you are happy paying. Once you have done that, and I think people should periodically recheck their decisions, then if the price of the asset is below the value you think it's worth you should buy it. If it drops further you should be happy to see it drop. DCA helps people fight the urge which Medoraman points out, where people buy their winners and sell their losers. But again, DCA should not be used to justify your purchase, the question is at what price do you think silver is overvalued?

I do not dollar cost average my own investments because the money I save and invest does not come in nice even chucks of money spread out over nice even chunks of time. The nature of my investable money is periodic lunp sums of money. I could dollar cost average that lump sum of money, so I could DCA $10,000 as $1,000 per month for the 10 months following the lump sum. Instead, I invest all $10,000 at once on the belief that it's just as likely the market will go up and I would miss out as it is likely that the market will go down and DCA would help. Otherwise, I have a target portfolio allocation which I rebalance yearly (which forces me to sell my winners and buy my losers just like DCA would do).

 

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Keep in mind the "spot price" of silver is not the set pricing. The margins for profits on buying and selling are not set in stone either. The spot price sets the base line for pricing, but you can price your stuff at any level you want. Profit is determined by how I paid to buy the stuff versus how much I sell it for. The lower I buy, and the higher I sell, the more money I make. Like I said, there is no law governing the "margins" (which I assume you mean as the level below spot you're being offered). I seriously doubt a dealer treated you like an idiot unless you tried to argue spot pricing (which you apparently don't fully understand) with him and asked for an unacceptable amount. Keep in mind that if you paid $40 for an ounce of silver, and the spot price is now $20, you will lose money on the sale. Any argument to the contrary will make you look like the proverbial idiot. Especially if you are only selling a couple ounces. Remember, volume is what generates the most revenue.

 

bad news for you chief...licensed financial adviser for 5 years. in fact, my credentials have been enough for judicial testimony in high profile cases. and whereas you may have pulled a definition offline and think you have an understanding of it; by purchasing a specific thing (silver in this case) at VARYING intervals, in VARYING amounts, you very well are DOLLAR COST AVERAGING. what you have defined is a simpletons version or rather, understanding of the CONCEPT. for example...if mr john doe purchases $1000 worth of silver at $20/oz, and then silver falls to $10 an ounce and he buys $2000, your argument would be that mr doe has not utilized dollar cost averaging...which would make you wrong. in fact, his dollar cost average is $12/oz.

the patronizing tone is for your layman understanding and resulting ignorant interpretation of a definition and taking it at its precise wording.

talk to me when you have $300,000,000 under management and a client worth $35mil calls you and wants to know what he is in for, per ounce of gold, and you reply to him that as a result of my financial advice he is in at $733.50/oz and he sends you another $10mil to invest for him. his 15 gold purchases made at IRREGULAR intervals in IRREGULAR purchase amounts result in a DCA of $733.50/oz...if you worked at my old firm you would be the guy who could repeat the series 6, 7 and 2-15 booklets verbatim, but drives a 92 Corolla to work and cannot understand why....shmuck

 

Licensed as a financial advisor for five years... means you passed your 7 and 66? (I'm assuming you passed the 7 since you're talking about having $300mm AUM.) I guess I could "talk to you" based upon your requirements, but I see no reason to.

For what it's worth, if you don't invest a fixed amount each time, you're not dollar cost averaging, you're adjusting your basis. That's it. The term "dollar cost average" specifically refers to investment of a fixed amount at fixed intervals. Although financial professionals don't always stick to that standard, they are misusing the terminology when they take actions to lower basis in a position and call it "dollar cost averaging." If you don't believe me, ask your compliance officer, as it's clear you've never taken your Series 14, so you should have one.

Also, I realize now why you made the comment about the series 7 and series 6 exams. You're not actually a financial advisor (adviser). You're a broker (series 7) and insurance agent (series 6 variable products). Advisors (appropriate spelling when applied to those whose practices are based in advising) need to pass the Registered Independent Advisor (RIA) exams. I don't remember which one that is (65 or 63), since I took the 66, which counts as both.

I took my licensing exams (Series 7 & 66) in 2004. I sold my advisory practice a few years ago to focus on business planning and development for Asian entrepreneurs. Maybe in the interim between when I was initially licensed (2004) and you were (2008?), they definition of dollar cost averaging changed, but I'm fairly certain it hasn't.

BTW, I'm impressed that you were able to get your client an average basis of $733.50 on his money invested with you "due to your financial advice" when there was really only three weeks or so (22 Oct - 13 Nov 2008) when the cost of gold was below $740 since you started as a financial advisor five years ago. I'm even more impressed that your firm was allowing you to recommend commodities to your clients in your first year. That would eliminate (to my knowledge) 6 of the 13 largest advisory firms.

 

lots of problems with your professed knowledge....

i am no longer licensed...licensed as in, was, as in, the past....i left the markets long ago to start my own companies

so not only did you waste an incredible amount of time trying to find holes in my explanation, you overlooked the simplest thing...commodities broker prior to licensing? built a book before i became licensed and then brought those clients into other products besides metals...?

as far as what licenses i held; i listed the most familiar ones to someone as simple as the original person i quoted. telling them i later took my 63 AND 65 would just confuse them.

regarding your issues with the accepted meaning of DCA...yeah, youre right, we wouldn't say that in front of a CO. but he didn't write or sign my checks....i provided his to him

 

I didn't miss anything. The statement "licensed financial adviser for 5 years" in the context you used would imply that you're still in the business. As for your being a commodities broker prior to licensing, that would imply that you got your client an avg basis of $733.50 per ounce in an environment where gold traded significantly below that.

Anyway, I'm going to save you the trouble of trying to defend yourself on this one and add you to my block list. It makes no sense for me to argue with someone lacking a fundamental understanding of grammar.[/quote]

 

Where do you get these other smilies at?

 

www.freesmileys.org

 

http://www.investopedia.com/terms/d/dollarcostaveraging.asp
Definition of 'Dollar-Cost Averaging - DCA'

The technique of buying a fixed dollar amount of a particular investment on a regular schedule, regardless of the share price. More shares are purchased when prices are low, and fewer shares are bought when prices are high.

Also referred to as a "constant dollar plan."

 

That is my argument, this would not be dollar cost averaging. Pretty hard to argue a definition, either your definition is right, or mine is right, there is no other possible answer:

http://www.investopedia.com/terms/d/dollarcostaveraging.asp
http://business.time.com/2012/11/15/is-dollar-cost-averaging-dumb/
http://online.wsj.com/article/SB10001424127887324050304578410840698473554.html
https://pressroom.vanguard.com/nonindexed/7.23.2012_Dollar-cost_Averaging.pdf
http://www.preparewithpru.com/shared/content/what-is-dollar-cost-averaging.php
http://www.smart401k.com/Content/re...rement-investing-basics/dollar-cost-averaging

Can you please provide a link where DCA is variable, because the Wall Street Journal, Vanguard, Prudential, and ALL others I could find disagree.

Classic appeal to authority, with no actual argument. Glad to hear you are doing well for yourself, so am I. Now that you have your gigantic ego out of the way, can you back up your position?

 

Can you guys degenerate this conversation just a little lower....it's really awesome how you can waste a couple pages on a term that can be used in different ways...bravo...nice job

 

No sir, that makes you cost basis $12.00.

By using your definition, any time you do anything that is not a single purchase (unless you happen to buy at the exact same price) you are utilizing DCA which is clearly not the case. Whatever you are selling, I am just not buying.......

BTW Rysherms, my guess is you are a fairly decent guy, you may have better luck just being that guy instead of trying to be something you are not. Give it some thought......

 

Lol I fully understand spot prices, thats not the issue, I am speaking about the current market value and how some dealers are (ASKING) for much lower then spot. I love how people try to guess how I asked it. I appreciate you trying to explain it to me either way, but in this case I am talking about some dealers who would steal your baby if given the chance. The idea is to get as much as you can for as low as you can, I get that... This is a point of people trying to take advantage of people who may not know better. Go onto youtube and look at some of the videos on this topic, then you will see what I am talking about.

 

Since you are quoting such fine and reliable sources as YouTube videos, there's nothing more I can say. After all, you can't put in it on the internet if isn't true.

 

Where did you hear that?

 

Why, on the internet, of course.

 

Man you guys are snotty to each other on this forum.......

 

Oh yeah. Why do you think Peter moved us to our own little dark corner. It wasn't for our benefit, it was to keep us away from the civilized folks. And you thought a AT debate could get rough, huh?

 

I've noticed this too. The other day when buying my weekly ASE I asked, "Out of curiosity, what would you give me for this if I were selling it instead of buying it?" The guy's eyes kind of shifted around the store and he almost whispered "A dollar over spot."

I recognize their rent, power, etc. costs as mentioned by others, and appreciate the fact that they aren't doing it for fun, they're doing it to make a profit. Between the $3 premium I pay to buy and the $1 premium they would pay me to sell I think it is fair enough, but it is kind of funny how they act ashamed about it.