Do I trust the "Forecast" reports???
Here is a question I recently received from one of my international readers.
"What do I think about the Precious Metals Forecasts predicting silver to remain where it's at for the rest of the year"?
That is an excellent question. If you do the "Google Shuffle" and search out silver forecasts and such, you will find anything from silver and gold diving lower than it currently is; to prices "Breaking Out" and starting their new surge. So...... what should we believe?
Well, the first thing to realize is, it doesn't really matter. Unless of course your sole purpose in purchasing silver and gold, is as a short investment. Buying low and selling high in the short term. If that's why you buy silver, then you are in the same boat as if you were trying to "Time The Stock Market". You can't do it. So don't try.
Now, if you happen to be as most of my readers; and myself are; and investing in silver and some gold as a means of reducing debt, buying items at a discount, as a hedge against inflation, to protect against an economic Armageddon, or as an insurance policy so if there is a period of mass inflation due to a currency and market crash and you don't want to liquidate your other investments and deplete your entire savings account....... then the answer is: "It doesn't matter".
Why is that? Simple.... Those buying silver for the reasons I posted above, are doing so for "Long Term Purposes". That means they are probably "Dollar Cost Averaging" their purchases. Which means, if the price of silver and gold go down, it allows you to buy more of it. If the price starts it's "Rocket Climb", you hold on and enjoy the ride. Unless of course you don't believe you have enough silver yet. In that case, you may be tempted to do a MAJOR PURCHASE to try and catch up because the price is climbing. I suggest AGAINST THIS. If you are truly "Dollar Cost Averaging" your purchases, then continue to do so. Whatever YOUR PLAN IS, stay on course. If you buy 10 ounce a month, then continue to do so. If you buy 2 ounce a week; continue to do so. Whatever you have scheduled yourself to do, and the goal you have set in place, stay on target. That's what "Dollar Cost Averaging" is all about.
What happens if the price starts to raise, and you think it's going to continue dramatically, so instead of buying 10 ounces a month, you decide to buy 100 ounces all at once? "Believing you're buying before it goes up further". Sounds great until the price goes back down and it drops further down than it was before it started going up. Then you made a bad mistake. So much for dollar cost averaging. STAY ON TARGET!!!
Now of course, there are exceptions to this rule. There always are. If you have a relatively large sum of money that you plan on using to buy silver, and you are systematically spreading it out over a 4-12 month period to accumulate whatever amount of silver you want to buy, you could change this around a little. Example: Instead of spending $1000 per month for 10 months, maybe you "FEEL" a surge in price coming, so you buy $2000-$3000 at one time. That's fine, but definitely don't do this to your entire balance.
At the same time, there may be some of you out there that have reached your goal. I recommended in a past post that for the average person/family, 500 ounces of silver would be a good amount to have for the economic crisis reasons I wrote above. 1000 ounces if you happen to have a much higher standard of living and current income. But there's absolutely nothing wrong with investing in silver for MORE THAN ONE REASON. I've bought and SOLD silver to buy my wife a New Rav4. Remember; I said one of my main reasons for silver is to buy items at a discount. Nothing wrong with buying silver to make a profit. So maybe you have your 500-1000 ounces of silver for your INSURANCE POLICY and you want to buy some more before it goes up too much.
On the other hand, some of the forecasts say that silver in 2015 is going to average the entire year at the $16.35 price range. That's about where it is today. But don't get me wrong. While I believe that for the Insurance Purposes, I have enough silver for my needs, if silver dropped to the $10-$12 price range, I'd definitely buy another 100 ounces; probably all at once, simply because the lower it goes, the GREATER THE ODDS ARE that it will go back up. Plus, a drop that low and a large purchase, lowers my average price in dollar cost averaging. So definitely no harm.
But for those of you who are still working on your "Insurance Policy"; meaning still working on that 500 ounces or whatever amount you decided on..... STAY ON TARGET!!! Don't worry about the price of silver. Matter of fact, for you, you WANT the price to be low. You'll be able to buy more silver each month for the amount of dollars/currency that you're spending. Now for those of my followers who are preppers, (Nothing wrong with that either), they have no intention of every selling their silver. Their silver will only get spent, when that IS the ONLY CURRENCY. I can respect that too. For the preppers, they like the price down. They are always buying. They aren't going for the 500-1000 ounces. They are going for as much as they can purchase. Like I said in numerous other posts, I buy silver for MANY REASONS. I have my INSURANCE POLICY. But, I also have a set amount of FACE VALUE American Currency in silver as part of my Prepping silver. How much should you have? That's your decision. That's for a total economic Armageddon. That's not something I usually write about. But, if I had to give advice for that, I'd recommend about $100 face value of pre-1965 silver coins (For my american readers). This would be about equal to 70 ounces of silver. But this would NOT BE PART OF THE 500-1000 silver that is part of your insurance policy. The prepping $100 face value of dollars, halfs, quarters, and dimes, is totally separate. Again.... a different subject. Maybe some day I'll do a post on "Prepping".
But for now, we'll stick with my major purpose, which is as a hedge, insurance policy, or as a means of long term debt reduction and purchasing at a discount. Don't worry about the forecasts. If the numbers stay low; GOOD FOR YOU!!! It means you get to buy more per month with you paper money. If the price goes up, then that's why you're dollar cost averaging. By all means, you can take your chances and try and TIME THE MARKET. People have been trying to do this with the stock market for years. If I could time the price, I'd be richer than the JP Morgan or Warran Buffet families. Maybe you get lucky. Maybe you don't.
1. If you don't have your 500-1000 ounces; STAY ON TARGET with buying on schedule.
2. If you have your 500-1000 ounces, and you feel like buying for investment purposes and you want to try and time the market, go for it. Nothing wrong with that. It can be a little exhilarating.
3. If you have your 500-1000 or you come across an influx of money and/or the price takes a major drop and you want to buy a large chunk at one time; that's great too. Nothing to lose.
I'm simply saying for those who don't have their 500-1000 ounces; bought for the reasons we've been discussing, that you shouldn't change your schedule. Dollar Cost Averaging is there for a reason. You could hold off and skip a few purchases, because you THINK it's going down, and instead the prices go up and up. Or, you think it's going up and you buy 2-3 months worth at one time, and the price drops like a rock. "So Much for Dollar Cost Averaging". Don't do it. STAY ON TARGET.
CYA: SE:
"What do I think about the Precious Metals Forecasts predicting silver to remain where it's at for the rest of the year"?
That is an excellent question. If you do the "Google Shuffle" and search out silver forecasts and such, you will find anything from silver and gold diving lower than it currently is; to prices "Breaking Out" and starting their new surge. So...... what should we believe?
Well, the first thing to realize is, it doesn't really matter. Unless of course your sole purpose in purchasing silver and gold, is as a short investment. Buying low and selling high in the short term. If that's why you buy silver, then you are in the same boat as if you were trying to "Time The Stock Market". You can't do it. So don't try.
Now, if you happen to be as most of my readers; and myself are; and investing in silver and some gold as a means of reducing debt, buying items at a discount, as a hedge against inflation, to protect against an economic Armageddon, or as an insurance policy so if there is a period of mass inflation due to a currency and market crash and you don't want to liquidate your other investments and deplete your entire savings account....... then the answer is: "It doesn't matter".
Why is that? Simple.... Those buying silver for the reasons I posted above, are doing so for "Long Term Purposes". That means they are probably "Dollar Cost Averaging" their purchases. Which means, if the price of silver and gold go down, it allows you to buy more of it. If the price starts it's "Rocket Climb", you hold on and enjoy the ride. Unless of course you don't believe you have enough silver yet. In that case, you may be tempted to do a MAJOR PURCHASE to try and catch up because the price is climbing. I suggest AGAINST THIS. If you are truly "Dollar Cost Averaging" your purchases, then continue to do so. Whatever YOUR PLAN IS, stay on course. If you buy 10 ounce a month, then continue to do so. If you buy 2 ounce a week; continue to do so. Whatever you have scheduled yourself to do, and the goal you have set in place, stay on target. That's what "Dollar Cost Averaging" is all about.
What happens if the price starts to raise, and you think it's going to continue dramatically, so instead of buying 10 ounces a month, you decide to buy 100 ounces all at once? "Believing you're buying before it goes up further". Sounds great until the price goes back down and it drops further down than it was before it started going up. Then you made a bad mistake. So much for dollar cost averaging. STAY ON TARGET!!!
Now of course, there are exceptions to this rule. There always are. If you have a relatively large sum of money that you plan on using to buy silver, and you are systematically spreading it out over a 4-12 month period to accumulate whatever amount of silver you want to buy, you could change this around a little. Example: Instead of spending $1000 per month for 10 months, maybe you "FEEL" a surge in price coming, so you buy $2000-$3000 at one time. That's fine, but definitely don't do this to your entire balance.
At the same time, there may be some of you out there that have reached your goal. I recommended in a past post that for the average person/family, 500 ounces of silver would be a good amount to have for the economic crisis reasons I wrote above. 1000 ounces if you happen to have a much higher standard of living and current income. But there's absolutely nothing wrong with investing in silver for MORE THAN ONE REASON. I've bought and SOLD silver to buy my wife a New Rav4. Remember; I said one of my main reasons for silver is to buy items at a discount. Nothing wrong with buying silver to make a profit. So maybe you have your 500-1000 ounces of silver for your INSURANCE POLICY and you want to buy some more before it goes up too much.
On the other hand, some of the forecasts say that silver in 2015 is going to average the entire year at the $16.35 price range. That's about where it is today. But don't get me wrong. While I believe that for the Insurance Purposes, I have enough silver for my needs, if silver dropped to the $10-$12 price range, I'd definitely buy another 100 ounces; probably all at once, simply because the lower it goes, the GREATER THE ODDS ARE that it will go back up. Plus, a drop that low and a large purchase, lowers my average price in dollar cost averaging. So definitely no harm.
But for those of you who are still working on your "Insurance Policy"; meaning still working on that 500 ounces or whatever amount you decided on..... STAY ON TARGET!!! Don't worry about the price of silver. Matter of fact, for you, you WANT the price to be low. You'll be able to buy more silver each month for the amount of dollars/currency that you're spending. Now for those of my followers who are preppers, (Nothing wrong with that either), they have no intention of every selling their silver. Their silver will only get spent, when that IS the ONLY CURRENCY. I can respect that too. For the preppers, they like the price down. They are always buying. They aren't going for the 500-1000 ounces. They are going for as much as they can purchase. Like I said in numerous other posts, I buy silver for MANY REASONS. I have my INSURANCE POLICY. But, I also have a set amount of FACE VALUE American Currency in silver as part of my Prepping silver. How much should you have? That's your decision. That's for a total economic Armageddon. That's not something I usually write about. But, if I had to give advice for that, I'd recommend about $100 face value of pre-1965 silver coins (For my american readers). This would be about equal to 70 ounces of silver. But this would NOT BE PART OF THE 500-1000 silver that is part of your insurance policy. The prepping $100 face value of dollars, halfs, quarters, and dimes, is totally separate. Again.... a different subject. Maybe some day I'll do a post on "Prepping".
But for now, we'll stick with my major purpose, which is as a hedge, insurance policy, or as a means of long term debt reduction and purchasing at a discount. Don't worry about the forecasts. If the numbers stay low; GOOD FOR YOU!!! It means you get to buy more per month with you paper money. If the price goes up, then that's why you're dollar cost averaging. By all means, you can take your chances and try and TIME THE MARKET. People have been trying to do this with the stock market for years. If I could time the price, I'd be richer than the JP Morgan or Warran Buffet families. Maybe you get lucky. Maybe you don't.
1. If you don't have your 500-1000 ounces; STAY ON TARGET with buying on schedule.
2. If you have your 500-1000 ounces, and you feel like buying for investment purposes and you want to try and time the market, go for it. Nothing wrong with that. It can be a little exhilarating.
3. If you have your 500-1000 or you come across an influx of money and/or the price takes a major drop and you want to buy a large chunk at one time; that's great too. Nothing to lose.
I'm simply saying for those who don't have their 500-1000 ounces; bought for the reasons we've been discussing, that you shouldn't change your schedule. Dollar Cost Averaging is there for a reason. You could hold off and skip a few purchases, because you THINK it's going down, and instead the prices go up and up. Or, you think it's going up and you buy 2-3 months worth at one time, and the price drops like a rock. "So Much for Dollar Cost Averaging". Don't do it. STAY ON TARGET.
CYA: SE:
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