Why are the premiums on silver so high?

I was already assuming in my example that there would be a flat dollar amount purchase every month.

 

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But you were missing the major point in your example. DCA is different than cost averaging, its mathematically stronger. It will always yield a better price than simple averaging.

 

Okay, I am SO confused, so maybe what I have been doing is not DCA after reading the above a couple of times.. I have bought most of my collection before 2018, when prices were below 18, 17, 16, 15, and so on sometime it would go 16 or 17 for a bit. Since 2020 kept buying but not near the amount as before because the prices roared up to the mid twenties. I slowed the roll beacuse the Silver I purchased say was averaging 17 dollars has now creeping up toward 18 or 19 because of the spike. Now I got the air set 27.00 a bit to much for me buying any, slowed the roll converting to gold when I see a opportunity. Thats how I average mine wrong or right, probably wrong.............clear as mud right...............I never could explain anything where normal people could understand.

 

Most people DCA stocks from their paychecks without thinking about it. They put $100 a pay period into 401k. This is perfect DCA. When stocks go up you buy fewer shares, when they are cheap you buy more shares. To do this with pm you have to dedicate X amount per X period. Unit average price would be buying X ounces per X periods. This will simply bet you the arithmetic average.

No one has to do it this way. I was simply reacting to misconceptions of DCA. It has a definitive definition, but many misunderstand it.

 

If I set aside 500 per month for silver and only buy when it dips below 16 I have much more silver than you do.

 

Not really.

Because it’s been over $16/ozt for almost a year which means you’ve bought very little silver this year whereas anyone doing DCA would’ve been buying silver every month including when it was at $16/ozt.

In fact you don’t even know if it will go back down to $16/ozt ever again.

Imagine all those people who are waiting for gold to drop back to $20.47/ozt like it was in the 1920s.

They would be sitting there waiting forever because Gold is NOT going to go back to $20.47 even if it was there in the past.

 

Yours is close to DCA but not quite since as you said yourself you’re buying less at the current prices.

DCA would be buying the same amount (in dollars) every month regardless of price.

Like if someone bought $100 worth of silver every month for 5 years regardless of the price of silver.

But hey everyone does their own thing. I think some people are worried $30/oz will be the new normal and $18/oz will be a long gone fondly remembered time.

Heck I remember buying at $16-$18/ozt and people would tell me they bought at $12/oz and were “waiting” for it to go back down.

It didn’t.

 

Oh but it did go back down to $12/oz in March/April 2020. The problem arose when no dealer would sell at that price. They added $6/oz dealer premiums.

 

What Masterswimmer said, you could not find any silver or I couldnt for 12.00 w/o addding premiums, AND STILL.

 

I do that with gold, but not silver. Silver is too volatile. You can play the swings.

 

I bought a bunch early last year. I've also been buying it for decades, I doubt if I need any lessons on how to buy it wisely from you.

 

yes

 

The premiums are so high because some of the big companies like JP Morgan want it that way. Premiums have been high before but never like this and that "short squeeze" BS only created more suckers to sell to! Not me, I'll stick to gold!

 

Obviously you do need lessons if you think dollar cost averaging isn’t a good idea.

Every economist on Earth would tell you that you’re wrong and that DCA is the most effective & intelligent way to buy.

 

Again I have been doing this much longer than you have "gam3r" How much silver do you have? what's your net worth? Enjoy the high prices and the premiums. sucker.

 

That's a bit over the top and uncalled for.

 

So was telling me I needed "lessons" on PM's.

 

Only after you flat out said that DCA was dumb.

Even though studies & experience have shown that it’s one of the most effective ways to invest period.

I simply called you out on being wrong about that issue alone and you decided to get all snarky about it.

 

Well, if you don't include SLV, PSLV, or other ETFs. I made a mint after PMs dropped last March then sold them later last year. I've yet to pay the tax man, but I'm still way ahead. May not have been physical but paid off for me.

 

every post you make here shows how out of your depth you are.