Lately, it seems that a day doesn't go by without me receiving a comment or an email from somebody complaining about how they're "still getting their butt kicked in silver because they bought in April of 2011". Since I've consistently advocated the regular stockpiling of physical metal for over two years now, I thought it might be fun, and worth the time, to crunch some numbers to see just how bad it could be for some folks.
First of all, I don't think that anyone whose only purchases of silver came in April of 2011 is still a regular reader of this site. Additionally, that this disgruntled, non-reader of the site would then take the time to email me seems a little far-fetched. Nonetheless, let's roll with it.
Below is the hard data. I began this blog/site on 11/11/10, so, let's measure two things:
DATE PRICE TUBE COST OR OUNCES BOUGHT COST
11/12/10 25.94 $518.80 19 $492.86
11/26/12 26.70 534.00 18 480.60
12/10/10 28.58 571.60 17 485.86
12/24/10 28.88 577.60 17 490.96
1/7/11 28.66 573.20 17 487.22
1/21/11 27.42 548.40 18 493.56
2/4/11 29.06 581.20 17 494.02
2/18/11 32.30 646.00 15 484.50
3/4/11 35.32 706.40 14 494.48
3/18/11 35.06 701.20 14 490.84
4/1/11 37.74 754.80 13 490.62
4/15/11 42.57 851.40 11 468.27
4/29/11 48.58 971.60 10 485.80
5/13/11 35.01 700.20 14 490.14
5/27/11 37.86 757.20 13 492.18
6/10/11 36.33 726.60 13 472.29
6/24/11 34.64 692.80 14 484.96
7/8/11 36.54 730.80 13 475.02
7/22/11 40.11 802.20 12 481.32
8/5/11 38.20 764.00 13 496.60
8/19/11 42.43 848.60 11 466.73
9/2/11 43.02 860.40 11 473.20
9/16/11 40.78 815.60 12 489.36
9/30/11 30.04 600.80 16 480.64
10/14/11 32.14 642.80 15 482.10
10/28/11 34.07 681.40 14 476.98
11/11/11 34.67 693.40 14 485.33
11/25/11 31.01 620.20 16 496.16
12/9/11 32.17 643.40 15 482.55
12/23/11 29.04 580.80 17 493.68
1/6/12 28.65 573.00 17 487.05
1/20/12 31.65 633.00 15 474.75
2/3/12 32.73 654.60 15 490.95
2/17/12 33.20 664.00 15 498.00
3/2/12 34.48 689.60 14 482.72
3/16/12 32.57 651.40 15 488.55
3/30/12 32.47 649.40 15 487.05
4/13/12 31.38 627.60 15 470.70
4/27/12 31.35 627.00 15 470.25
5/11/12 28.86 577.20 17 490.62
5/25/12 28.37 567.40 17 482.29
6/8/12 28.46 569.20 17 483.82
6/22/12 26.66 533.20 18 479.88
7/6/12 26.89 537.80 18 484.02
7/20/12 27.28 545.60 18 491.04
8/3/12 27.79 555.80 18 500.22
8/17/12 28.00 560.00 17 476.00
8/31/12 31.37 627.40 15 470.55
9/14/12 34.60 692.00 14 484.40
9/28/12 34.52 690.40 14 483.28
10/12/12 33.63 627.60 14 470.82
10/26/12 32.01 640.20 15 480.15
11/9/12 32.59 651.80 15 488.85
11/23/12 34.11 682.20 14 477.54
If you had purchased a tube of Eagles every two weeks since this blog/site began, you would now own 54 tubes or 1080 ounces of silver. This would have cost you $35,524.80 and your average cost per ounce would be $32.89.
If you had decided to, instead, buy $500 worth of Eagles every two weeks since this blog/site began, you would now own 810 ounces of silver at an average cost of $32.29.
If you came late to the party and only began your tube-every-two-weeks extravaganza on 4/15/11 with the price at $42.57, you'd now own 860 ounces at an average cost of $33.50/ounce.
What if you only bought a tube on 4/15/11 and 4/29/11 and then took the summer of 2011 off? You were then lured back in by the S&P downgrade of 8/5/11 but scared off again after the steep drop in September. Convinced we'd seen the lows by late 2011, you then bought a tube every two weeks in 2012. If so, you'd have 600 ounces of silver at an average cost of $33.23/ounce.
Maybe you did precisely as above, buying only six times and on those exact same dates in 2011. Then you only restarted buying just as price peaked in late February of this year. You'd now own 520 ounces at an average cost of $33.49/ounce.
And what if you're just the unluckiest sap on the planet. Dumb as a box of rocks and easily duped into buying only when ole Turd gets over-the-top excited. You made just 12 purchases and you bought on 4/1/11, 4/15/11 and 4/29/11, 8/5/11, 8/19/11 and 9/2/11, 2/3/12, 2/17/12 and 3/2/12, 8/31/12, 9/14/12 and 9/28/12? In that case, you'd be the proud owner of 240 ounces of shiny silver at an average cost of $37.78.
Feel free to fiddle with these numbers as much as you'd like. Construct your own best case and worst case scenarios. Add in an acceptable dealer premium and your local sales tax. Whatever. Have fun with it. The point is this:
Your best strategy is to be consistently buying physical metal, either gold or silver, regardless of price. Sometimes you'll buy high and sometimes you'll buy low. Most importantly, however, you'll be slowly accumulating a sizeable position in the only assets guaranteed to protect your savings and purchasing power against the constant devaluation of the dollar, brought upon us by our politicians and bankers.
BTFD or BTFR, it doesn't matter. Just buy.
TF
