Continue with dollar cost averaging or change strategy?

With PoS going above $30 today, I'm just wondering if I made a mistake using a dollar cost averaging strategy to build up my stack. I'm buying every two weeks and it seems the price I'm paying today is always higher than the price a fortnight ago. How effective is dollar cost averaging in an environment where prices are constantly increasing?

The way I see it, I have the following options:
- continue DC averaging
- go all in or in bigger chunks and/or more frequent (once per week? daily? hourly?)
- give up and stop altogether as I've missed train (I've got only 1.3% of my target stack currently)

Appreciate anyone's thoughts on this. Thanks in advance.

 

This is a psychological thing, those waiting for a pullbacks will be waiting forever imo.

To give you some perspective, I bought in at these prices $21.8 USD, $23.2 USD, $23.8 USD, $24.5 USD, $26.3 USD. SMSF purchase was at $27.3 USD. I didn't wait for pullbacks. I saw the chart and patterns around 23 and decided to increase the size of my purchases. I have openly stated about 6 weeks ago the pullbacks were weaker and weaker (this was in the 23.xx range).

If you ask me now if there may be a pullback - you really have to do your research and make a gut call on it. I can't say that there will be or won't be. What I am seeing now is longer waiting periods for stock to come in and virtually non-existent small pullbacks.

Make a call buy and close your eyes. At the moment its only $30, still time to jump on the train. Buy what you can afford, also you can always sell if you need fiat.

Slam

 

I get paid fortnightly. I generally don't have much of an option.

If I put the cash in the bank and tried to wait out a dip for a buy opportunity, I'd likely get burned waiting.

 

if you only have funds available fortnightly then buying every 2weeks it the best thing you can do.
maybe start increasing the % of your pay that you put towards silver every fortnight.
if i was in your position my thinking every 2 weeks would be, "do i think it's probable that silver price will be higher in 2 weeks time?"
if yes -> put a greater % of pay towards silver now.
if no/uncertain -> put a conservative % of your pay towards silver.

 

some thoughts...

If you have the fiat... i'd lock in atleast 10-30% NOW instead of 1.3% + 1.3% + 1.3% for a year...

Buy a 10-30% whack.... then continue to DCA.... then when you are comfortable... get another WHACK.

I began this game a few months ago and in so I decided i'm happy to risk a little to "get set"... now that i have a "setting", i can now DCA, or move around a bit into stocks/etc without the heart ache of not being in at all.

I thought, yes there was a risk of "getting set" to high in price... it was a risk assessment which said.... just "get set" with buying a chunk of 25% of target.

I am now set to get *some benefit*
I am not over exposed to *miss a dip*
I will not make a the best result on 100% of my investment... but you are silly (or gullible) to set out expecting that result...

 

I must be missing the whole arguement here. The dollar cost averaging arguement is more aimed at trying to lower you entry price on a lowering asset price, with the ultimate aim of being able to be in front, at a lower average price, rather than the original purchase price, when the asset increases in value.

For an asset increasing in value, DCA would seem to be void point. If one knew for certainty, that an asset was going to increase in price (over and above other assets), then one would put 100% of their money into it, whenever that money became available. You wouldnt want to DCA. If you dont know for certain that an asset will increase in price, but want to get more exposure to it, then you main aim wouldnt be to DCA, it would be to throw what assets you could at it, that you are able to afford and are comfortable with.

 

+1.

I hold a position of around 25% gold, 75% silver. I too get paid every fortnight & fortunately (kids have left home) I can put away enough for 500g silver a fortnight. Every so often I skip a fortnight to have enough for a 1/2 ozt from Perth Mint, to keep the balance at 25/75.

I also hold the same % strategy in my SMSF, albeit in PMDS unallocated. Although... if the GSR drops to around 45 I may swap some Ag for Au. Not sure yet. For my physical, I just stay at the 25/75 thing.

But back to the DCA point of the OP - I guess that's what I'm doing as I buy a fixed amount of PM, whatever the price, on a regular basis.

 

Just keep going, buy when you can. What are your targets that is more the question ? Hit a target rather than a dollar amount is the way to look at it.

100oz
500oz
1000oz ?

 

DCA is not the way to go with Silver. Buy as much as you can as soon as you can... otherwise you'll be paying more in the long run.

 

I personally went from no PM to wanting some. I looked at price history etc and figured i could wait for a pullback in price then buy on dips and so on.
I then was listening to "Kingworldnews" Jim ricards i think it was and he was saying " silver will go past $21.50 then move quickly to $30. He then said that you could straight dollar cost average every month but timing the market is better left to the pros. The main takeaway i got was he said if you do want to time it and wait dips you need to have a position now.

So thats what i did. Got stuck in with a very good position then if it pulled back better buying for me. Or like you like "DCA" into it from there. Turns out if i waited for the dip i would still be waiting.

DCA is good as it is a systematic saving plan style of investment. so if you go that way, set your budget and do it. If things change down the track reasses and change the plan.


Hope this helps

 

My only advice is to get at a minimum 50% of what you want to invest, straight in once you decide. Depending on market outlook you may want to go more.

Also depending on the outlook you may put 25% in on the next pullback, then 12.5%. You'd have 12.5% left and I wouldn't try to finesse that amount.

Just keep that dry, or go in with the remainder next opportunity. The crucial bit is getting the first 50% in.

 

Getting into PM's is like getting into a freezing pool of water, you have to dive right in as soon as you decide you are going to do it. If you try to ease into it you get cold feet and don't end up doing it.

 

Thanks for all the suggestions. There seems to be far more options than the ones I've considered. For those advocating going in with larger chunks, I'm not too keen in paying upfront and then having to wait months to take delivery especially the 1kg pamp bars. It's one of the reasons why I'm making over-the-counter purchases in small percentage amounts (<1% each time). Should I have any concerns about the company going bust during the wait period or is there nothing to be too concerned about? Gold is definitely in my plans. I was thinking alternate weeks for Ag/Au on 50:1 ratio. Fortunately I don't have any dependents so no-one to answer to for any bad investment decisions

 

When you have to wait a long time for delivery, your mind develops the most sinister scenarios.
During the last silver shortage scare when delivery delays stretched to 16 weeks, I was very concerned the bullion company that I purchased from was going to go bust.
Other stackers must have felt the same way. If I wanted the same bar for instant delivery, I had to pay nearly $2 an oz extra to source it from ebay.

 

http://www.sharelynx.com/chartsfixed/1TradingSentiment.gif

Any suggestions on where we are? Does 5 mark 1980 or 2008?

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I'm not concerned about waiting for back orders. I've got 2 such orders from 2 different companies due in sometime mid December and again January. The deals were done on the spot price 2 weeks ago so its silver in the bank as far as I'm concerned. I'm having a 'slight lull' in the buying plan just now to sit back breifly and enjoy this great silver news. I am sure that eventually we will all be just as excited about the 40.00 breakout when it comes........YES!!

 

The worst thing about a wait in a rising market is:

1. The order is unfulfillable. They refund. The price is $10 higher and you have no silver.

2. They're holding your money waiting for a pullback to buy it cheaper.

My feeling is that there is ALWAYS silver for immediate delivery at the right price. If you need it now then pay the bit extra and get it.

 

Once you pay the dealer, they cant refund the money. They place an order for it right away. They give you a date of delivery.

I don't think they can turn around 1 month later when you expect delivery and say theres no silver. Heres your money back. In the mean time silver has gone up $5-10 bucks per oz.

I don't think the above will work out well for the dealer.

Slam

 

Think of it as free storage...