When would you Stackers consider it a good time (GSR, Gold/Dow etc) to shift between the PMs? Any thoughts?
My semi mathematical mind suggests that as the GSR approaches zero, change silver to gold. As the GSR approaches infinity, change gold to silver. I offer no advice as to what those action ratios would be
it depends.. i recently swapped 25% of my stack to gold around the gsr being 50-55, most of this ag though was purchased around 15-18aud. if the ratio moves to 30 then another 25% of my stack goes automatically to gold and i will be keeping the additional 50% ag.
our bits of silver were bought during the time when GSR was going from 60 down to 50, i think we'll start trying to swap some for gold if/when GSR gets closer to 30.
I plan to move all my bar type silver to gold at 30:1 every last bit. At 20:1 i'll move all my coins that I hold as bullion. At 15:1 any duplicate collections I have will go. At 10:1 I'd be selling almost everything silver to go for gold.
I think chopping back and forth is expensive over the long term. But if you had bought at 70:1 and switch at 30:1 then even if you sacrifice 10 units for the spread you're still better off. My silver is all bought "in lieu" of gold. The silver buy was a strategy to get more gold later than what the money would have bought originally. I'd find a gold to silver swap much harder to consider. Unless the ratio got ridiculously high like 100:1 then I'd switch a small amount but it depends on why the ratio is that high.
The buy/sell spreads in silver are quite high so there'd want to be a GSR ratio of 20:1 or something before I'd consider something like that. Although if the GSR was something like 20:1 you'd want to consider why it is at that ratio and its backed by fundamentals, why change ?
Lets say someone bought silver at 70:1, say 2100 ounces. So they could have bought 30 ounces of gold instead originally. Now at 30:1, you could change the silver over to gold and get 70 ounces of gold. Sacrifice 10 to the spread say, thats 60 ounces of gold or double the amount someone who put the money in gold originally has. Sounds good to me. At that point I wouldnt care about the fundamentals of silver. I just know that gold IS fundamental
A few thoughts... Ratios are good revealers of trends over long periods of time - so the best way to 'play' them is to use them to guide your long-term accumulation pattern. In that way - when your hypothetical 'future' date arrives - you will already be properly positioned! Using future ratios to make a PM swap (presuming you could somehow swap 'at spot') seems unnecessarily risky. It's like swapping lifeboats - why risk a dunking? If you believe that the GSR will continue to drop (as many here clearly do), then 'technically' you should only be buying silver today - at least until the ratio's decline slows down - otherwise the gold you purchase today will be making a loss when compared to silver. (As Intelligencer suggests above) Very few of the fundamentals driving silver today are going to lessen over time - so the GSR can only 'reverse' as gold goes into the stratosphere - but that event will drive up silver too! So in terms of pure wealth preservation - and at today's ultra-low silver prices - there might be a case for *never* actually holding any gold at all!
