It is no secret to anyone who has been watching the precious metals market the last year that the price of silver is much more volatile than that of the other precious metals. A few times in the past year, I have bought silver bullion a day or two before the price jumped up a dollar or two. More often though, I have bought a day or two before price took a steep dive. But price volatility doesn’t bother me in this phase of my silver investing program. That is because I accumulate physical silver bullion for asset preservation and insurance against the possibility of severe economic calamity, not for investment.
The best strategy for silver investors of modest means to accumulate silver bullion has two components: regular interval purchases, and automatic cash deposits to your silver bullion accumulation vehicle.
I do not have the cash assets to buy the amount of silver bullion that I feel I need for insurance and asset preservation all at once, or even over the course of six months.
Therefore, I must buy silver bullion out of my regular income. The best way for someone with a regular income to save dollars is through an automatic payroll deduction to a savings account or 401k every paycheck. The best way to facilitate regular interval purchases of silver is to automatically direct one’s silver investing dollars to a silver bullion purchase account. By buying silver bullion regularly, the average purchase price of the bullion over the course of the year will be pretty close to the average price of silver bullion for the year. That the price of silver jumps up or dips down a day or two before or after a particular purchase is irrelevant to the long term results because the long-term trend is up.
The first component of the best strategy to accumulate silver bullion is to buy often. Make a purchase no less than monthly, and preferably as often as income is received. For someone who receives a paycheck every two weeks, this means twenty-six purchases of silver each year. Using this strategy for the purchase of gold is impossible for those of modest means because of its much higher price. And it is very inefficient to buy just a couple of grams of gold each paycheck or once a month. The premium over the melt value is outrageous.
The problem with buying small quantities of silver every couple of weeks is that from most sources, small quantity means big premiums over the spot price of silver. Part of the solution to this problem is to automatically fund a silver purchasing account as mentioned above. Anyone with some form of bill pay on their checking account can schedule a regular payment to their silver buying account. If you do not have bill pay, I advise you to get it. If your bank or credit union doesn’t offer it, get a new, or another, bank or credit union. I have bill pay at both a bank and a credit union at no cost to me. Of course, without bill pay, one can mail in a check to one’s silver purchasing account each payday. But that takes discipline that many do not have.
When I started buying silver bullion in 2008, I had to save from a few paychecks to be able to make the minimum purchase of 50 ounces to buy at a premium of less than 4% over the spot price of silver. At times, the price of silver moved up a couple of dollars an ounce while I was accumulating enough in my checking account to purchase 50 ounces. In 2011 the price of silver has moved $2 or more in a single day several times. As price goes higher and economic conditions deteriorate, the size of the price swings will increase.
A few months ago I discovered an organization through which I can purchase as little as one ounce of silver at or near the spot price of silver. At this firm I can accumulate my silver until it is cost-efficient to have it shipped to me. Even though I receive no form of compensation or recognition from this organization by recommending them, this venue does not allow commercialization. To learn the name of, and get contact information for the organization, click through to my silver investing blog via the link provided below.
I recommend you get started on a regular purchase program of silver bullion now. In my opinion, it is the best long-term financial insurance you can buy.