Big Buy #2; looking for insight

Discussion in 'Silver' started by AndyPointO, Jan 13, 2011.

  1. AndyPointO

    AndyPointO New Member

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    Alright, I feel like I SHOULD be rallying for silver spot to keep increasing. Yet, each time I see the price rise, my stomach wants it to go back down I can scoop up some more... I guess this means I don't have enough yet! I've outlined as much as possible here, hoping it will give some insight to my situation. Any opinion is welcome, especially ones that tell me I'm wrong and need to take a different approach. Thanks to everyone who helped me so far!

    Background: 18 years old, attending university in the USA for Chemical Engineering. Parents paying tuition, but I put money towards books and will be responsible for about $22,000 in loans upon graduation. I work a job during the breaks, but doesn't bring in anything significant while school's in session. Looking into an engineering internship for this summer, which generally pay upwards of $15-$20 per hour.

    Budget: ~$4,000 USD in savings, plus 42oz silver [details in prior threads], my only current investment

    Income: None; apart from a part-time job I work during breaks. Negligible until summer. Looking for engineering internship, which should net $15-$20 per hour.

    Expenses: $250+ per semester for books, ~$100/month for eating out, occasional poker

    Available to invest: $2,000 max
    Looking to invest this round: $600-$1,000 (want to leave some to buy the dips, should they occur)

    Insight:
    -Strongly considered adding some gold to the portfolio, but decided to accumulate as much silver as possible for now. (If anyone strongly disagrees, please say so)
    -Monarch's 5oz hand poured bars are looking pretty nice. I can get 20-30oz and still be within my limits. Not quite ready to start stacking the 10oz bars yet.
    -Avoiding coins so far, apart from 90% that I can get for melt value. Not worth the premium to me at this entry level with limited funds.
    -Don't want to regret not buying enough. Also don't want to regret buying before an unexpected dip/crash.
    -Long Term. I have a few decades ahead of me for my investments to appreciate.

    I think the biggest think I'm trying to remind myself (and will eventually need to explain to my father) is that I'm not "spending" money in the conventional sense, just converting it. I have a local dealer I can go to and get it converted anytime I'm home. I still like to have cash on hand of course, but I think I'll see a point where a majority of my assets are in PM. Dad has always been opposed to the idea, but he is typically stubborn once he has an opinion. I wanted to get in the game when silver was $7 and gold was sub-$1,000. He discouraged it, and I missed out on an opportunity to buy silver at a record low. I respect his opinion, but I did my own research and consider myself ready to start making my own financial decisions.

    SO, my current decisions:
    A) Invest $600 to $1000 (saving $1000 for later)
    [OR] Invest all $2000
    [OR] Invest nothing; wait for another dip

    B) Stick strictly to silver [OR] throw some fractional gold in there too


    Again, a huge thank you to anyone who puts their insight in here or in my previous posts. I don't want to be rushing into something this big without directly consulting some people who know what they're doing. Can't wait to add to the stack!

    -Andrew O
     
  2. Big A.D.

    Big A.D. Well-Known Member Silver Stacker

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    On that budget, you can easily pick up a tube of 20 ASEs for $660-$670.

    If you think you can time the market and buy in the dips, good luck to you, but if I were in your shoes I'd be trying to cost average my purchases out over the long term (and like you say, you do have time on your side). Since you're in the USA, the silver eagles will be very liquid when the time comes to sell.

    You could also afford to pick up some fractional gold at the same time if you wanted to, and that wouldn't be a bad thing if you want to save on shipping costs (if you're buying online), or you could keep some extra cash about in case you see something really cheap or something you really want.
     
  3. Randomz

    Randomz New Member

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    Buy $1000 silver now, then buy $500 more if the price goes lower than what you paid for it.

    If the price drops further again, buy the last $500.

    Sit back, relax and wait for it to bounce back up.
     
  4. JulieW

    JulieW Well-Known Member Silver Stacker

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  5. Forge

    Forge Member

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    At the moment, I'd suggest - B - throw fractional gold in there. Here's why. Silver is good while the world holds itself together, but when things go square again, it's value is going to drop. It's good to have in terms of barter, and good to have in terms of a speculation, and in the long run it is going to increase in value. But it's not gold, and gold is where all the value is going to flow when you start seeing currencies collapse or transform.

    Otherwise get the silver, but have a short term plan (3-6 months) to switch it for gold.

    Remember that the next crunch is not corporate, but sovereign.
     
  6. Silver is Money

    Silver is Money Member Silver Stacker

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    Everyone is different, but personally I'd dollar cost average using a timeframe as a guideline.

    For example, if I had $2,000 and if I gave myself 4 months to spend my investment, I'd be buying $1,000 worth now and then investing $250 in silver or gold each month for the next 4 months. It's almost impossible to pick tops and bottoms, even in the short term, so while you may not always get the best prices when dollar cost averaging, at least you will average out your costs over the long term.

    As you save more money for investment purposes, you can purchase more PM's.

    I'd also stick to the fractional PM's, such as junk coins or higher weighted bars (kilo bars etc) so you can initially get more bang for your buck. As you start to build your stack, you can then begin looking at coins/bars that attract higher premiums. If you're not comfortable holding bars, then stick to fractional coins, provided you can get them with little or no premium.

    As always, do your own research and invest in a manner that best suits your personality and your financial situation.
     
  7. THUCYDIDES79

    THUCYDIDES79 New Member Silver Stacker

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    Since you are studying physical sciences - have a read thru this

    copy & paste

    129.3.20.41/eps/mac/papers/0203/0203005.pdf
     
  8. Terry88

    Terry88 Member

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    Go long term and just dollar average. A consious decision I made to avoid watching it go up and down. Off course if it does dip major then maybe I'll purchase a little more.

    Respect your Dad and ask why he say so. I'm sure he may have some personal reason which maybe valid. My Dad and I both had different views on the Stockmarket so he never took an interest in Stockmarket because my Grandfather had lost it due to some financial clamity. Told my Father that I was into Silver Bullion and surprisingly he's very supportive and told me to convert it to Gold one day for Family.

    So, give your Dad a Silver Coin bullion for his Birthday or X'mas Present and I'll bet over time he'll start stacking too and take interest in your stacking.

    Happy Stacking.
     
  9. AndyPointO

    AndyPointO New Member

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    Thanks for the wide spectrum of opinions everyone. I think I'll call home tomorrow afternoon and run it by the parents; get their thoughts on it. You can count on an updates immediately after!

    If I had to make an order right now, though, I think I'd be going for five 5oz bars and a 1/10 oz gold round. Not too worried about protecting through gold yet, but I suppose it can't hurt to start. If that's how it happens, it'll bring my inventory to approx 67oz:

    Five 5oz Silver
    Five 3oz Silver
    Seven 1oz Silver
    One 1/10oz Gold
    ~20oz silver in junk coin

    Never thought I would get this far in less than 2 weeks. Quite addicting.
     
  10. SparkySilver

    SparkySilver New Member

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    One thing to remember here in the states, if you purchase less than $1000.00 they can charge you sales tax. I know this is correct for Texas... not sure what other states.
    So to answer your question... I would try to stack in $1000.00 + buys.:)
     

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