What do do with your dry powder

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#1 Wed, Aug 10, 2011 - 12:54pm
worldend666
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What do do with your dry powder

I posted a question in the comments saying that I am sitting on a substantial amount of cash. Although I am not totally out of metals I could buy a lot more, especially if I buy paper gold with 10x leverage.

However, we are late in the day in this recent rally. Isn't chasing the price a very foolish thing to do? In my experience it often does not work out well, but on the other hand if we really are seeing a bank meltdown in Europe then gold really could be the only safe place.

Opinions?

Edited by: worldend666 on Nov 8, 2014 - 5:31am
Wed, Aug 10, 2011 - 1:16pm
AugmentedFourth
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Me too...

I'm curious on some other peoples take too.

I'll probably supplement some of my miner holdings.

This is my own completely uneducated theory; But I think there is potential for them as an attractive option for those fleeing from equities to leave some cash on the table while reducing their risk with high-value and solid-fundamentals. In short, they could be seen as a way to expose yourself to some higher risk/reward than bonds but offer more of a fundamental safety-net than most stocks...all contingent on the prevailing perception of the underlying metals of course.

Wed, Aug 10, 2011 - 1:21pm (Reply to #2)
97guns
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i have 22k from a 401K that i

i have 22k from a 401K that i just closed down, burned around 2K of it over the weekend and will be averaging the rest in the coming weeks. for me its nothing but physical.

Wed, Aug 10, 2011 - 2:54pm (Reply to #3)
worldend666
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Averaging in over a month or

Averaging in over a month or 2 was a suggestion a friend made. Maybe that's the best idea when you aren't sure if things are getting toppy?

Fri, Aug 12, 2011 - 8:32am
pourty
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Averaging or entry points?

I've got a goodly sum to put into PM's right now as well, unfortunately, the money showed up this week, not last week, so I'm left wondering where to put my foot in the door.

I know for the long term, I could just hit the buy button and sit back and wait, but I don't want to go through the mental gymnastics of watching my investment lose $100 per ounce in the short term... it's a psychological thing, I guess.

That said, I stayed up nearly all night watching the gold price last night. It's nerve wracking. I want it to get down to $1720 or $1730 before I hit the buy button, it never got there.

Averaging is a good idea, but I hate the idea of paying for multiple shipments. And I don't have enough money to invest to warrant using tulving.com at this point. I'm primarly looking to go through Providentmetals.com.

It just doesn't sit right with me to spend $1800+ per ounce after premiums on something that was $100 cheaper a week ago... 

I dunno... it's all big talk until you're looking at one more mouse click to spend $20K in a single transaction... then it gets very real, very quick...

Sat, Aug 13, 2011 - 3:02pm (Reply to #5)
worldend666
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Hi Pourty I hear what you are

Hi Pourty

I hear what you are saying. Delivery costs complicates things. In my case I am specifically speaking about leveraged gold. I have a nice stash of physical already which I have held for a year and a half.

In the end with my "play gold", I decided to average in. I have made 3 buys so far out of a planned 10, at 1795, 1780 and 1750. My next buy level is 1720 and then 1685. I don't think it will go much lower than that but the distance between my buy levels increases each time so I won't get hammered in a big drop, so below there I am looking at 1620 and then 1500. Even then I will have only bought 60% of my planned maximum.

What if it never drops so far? My plan is to buy 10% per week until I am all in, so if the price starts rising again I will eventually buy it all anyway.

Maybe it's just voodoo but I feel a lot better about it. I have already saved myself buying in at the top and getting heavily burnt.