Dollar Cost Averaging

Is it really DCA if you don't have a choice between buying in a lump sum vs spread out over time.

 

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I'm buying monthly. You can do it daily, weekly, monthly or once a year.

 

If I were a believer in the dollar collapse apocalypse, and I most certainly am not, but if I were, I'd stick to one ounce stuff and drop all the rest of it. 10oz. is too illiquid and dimes tend to be bad in terms of over melt premium, unless you have an unusually good source.

 

Hi Bman33,

I don't think you're doing anything wrong here. Buying each month is a great way to invest over time. And as long as the premiums are at a level you willing to tolerate.

One thing I would like to ask, is do you have any exposure to dealers that sell at or below melt? If you do I would suggest perhaps changing the frequency of your purchases to whenever those dealers get PMs/junk silver.

It wouldn't help you if the market dipped dramatically, but you could start to sell some off after each buy to off-set costs and potential losses. Say hold on the nicer examples and sell the lesser ones.

~JobIII

 

I get my junk from my dealer for just under $1.00 under spot. Better than Provident Metals which is the best I could find on line. I get my 1oz rounds and 10oz bars for $1.25 over spot. The dealer usually buys back at spot on those three items. Right now is an exception because he had a lot of inventory so he's buying back at 20 cents under spot. There is a dealer that is buying at spot that I know but he's 2hours drive away. If I were to sell at a large quantity I would drive the two hours. I am not a zombie apocalypse guy, I just like silver buying and selling. I have made money doing it but I know I need to be careful.

 

That's great! I also get my 90% at about a $1 under spot. But the problem is that I have to wait until stuff comes into the store. This summer has been a terrible buying time for me.
Generic bullion is sold at melt.
ASE's I can sometimes get for a $1.00 over.
Silver Dollars are going for $19.

I also factor in the extra costs for any sales / buys. You have to. Back when I had Jeep and gas was $4/gallon I missed a ton of great buys simply because the travel would have killed the profits.

Also not a doomsday prepper.

~JobIII

 

Did you mean you buy 90% at $1.00 over spot? Otherwise, I'd get a bunch of friends together to set up a bucket brigade, buying silver at $1.00 under spot and selling it right back at spot...

[edit: "bucked brigade"?]

 

Yes I meant just under one over spot. I got 13 90% quarters for $47. That was 14.5xface and came out to $2.00 over melt for the entire purchase.

 

Those are incredible prices!

 

I thought that's what you're paying for 90%?

if it's 14x Face, you buy at $13? Right.

 

No I meant I pay slightly over spot, sorry for the confusion. For example

 

I paid 13 cents over melt for a 90% quarter.

 

Bought 13 of them.

 

No worries. I usually get confused about how to figure out the pricing.

 

I am still happy with the buy and sell prices I am getting with a dealer. I started off paying $2 over spot to buy and $2.00 under spot to sell.

 

Ok, so I am spending about $50.00 a week on silver, about $200.00 a month. I am buying 90% silver coins doing this. Does this sound like proper DCA? Any constructive advice would be appreciated.

 

Lately, I have been going overboard. The last couple weeks I have bought all the junk and 999 fine in my local coin shop. Which is fine unless silver takes a major dive. Today I nearly paid spot for 90% because I was a bit greedy and $2 over for BU ASE's. Not sure that was the smartest move.

Your buying plan sounds like DCA to me. Just think of it as payments to your PM Silver IRA I would also track the purchases and sales (if applicable). That way you have an accurate and up-to-date understanding of what your stack cost you over time.

~JobIII

 

I'm tracking every purchase I have ever made. It's all on an Excel Spread sheet that has formulas set up where all I need to do is enter in spot price and a lot of data pops up on all my purchases. It's fun tracking the stuff.

 

Ok, so a guy at my coin club sells junk 90% all the time regardless of what spot is. He said he applies DCA to selling. I know he doesn't buy anymore. Anyone have any experience with this?

 

That's the big catch for DCA -- it does the opposite of what you want when you're selling.

To buy, you want to spend constant money over time, getting more silver when it's cheaper.

To sell, I guess you'd want to sell constant weight (or count or FV or whatever) over time, getting more money when it's more expensive. You definitely don't want to sell for a constant dollar income, which would mean selling more when the price you're getting is lower, and selling less when the price is higher.