Large Purchase Strategy ??

[IdahoCopper]

Lets say, you came into a rather large sum that you wanted to buy PMs with. As an example lets say, $500,000.

In today's market, how would you invest? It doesn't really look like the Boyz are done looking for the bottom, so the prices could go down, potentially another 20-25% And it is also possible that it really is now close to the bottom, and prices could go up, even into moonshot territory.

Would you dollar cost average for several weeks or months, spending a set portion of the cash each time? Doing that, would you have some plan to change quickly if prices started going north rapidly?

It seems like dropping the entire wad in one go today, may not be the smartest move. What do the smart people have to say?

[NHsorter]

GOLD. KILO. BARS.

That would be cool as hell

Wish spending 500K was a problem that I had!

[93_Confirmed]

I would definitely DCA with a large sum like that. Maybe something like $41,666 a month for a calendar year? I would purchase mainly ASEs (Monster Boxes), 90% bulk, and some foreign bullion (Maples, Libertads, etc.) along with a few large JM and Engelhard bars).

[IdahoCopper]

Wish spending 500K was a problem that I had!

Not really. Its a terrible responsibility to do the that best you can with it and not screw up.

[barrytrot]

Dollar Cost Averaging is a trick that an investment broker created and it caught on because what it says is, "if it goes down you win" and "if it goes up you win".

What it really means is that your investment broker wins. I became an investment adviser specifically to see why they exist. And I can tell you it is NOT to help their clients. The rules literally dictate that you cannot help your clients. It's really quite sickening.

Look at the major players, do they buy "1% of the company" each week so they "average" their price. Not usually. They buy in NOW. They strike. They research their deal so they know their odds of winning are GREAT and then they strike. You don't get to OWN companies by "dollar cost averaging".

Naturally the major players don't always buy EVERYTHING but whatever they do they consider "on its own merits". They don't say to themselves, "well I bought at a higher price last week so this is a great deal. Or I bought at a lower price last week so this is great because my previous investment went up." They consider each deal "on its own merits".

So if you, through your research have determined that now is a good entry point then enter at the level your gut tells you. That might be 100% that might be 1%. Whatever it is THAT is the investment. Each time you invest or when you sell you consider that entry or exit point "on its own merits".

If you go in thinking, "whatever the price is and whatever my feeling is today I ALWAYS buy $x on Tuesday" you definitely won't be in competition with those that consider each deal by itself.

[silverflake]

I would buy a new extended cab, four wheel drive pickup truck..........made entirely of silver.

Nope, just kidding. I would take half of it and buy some land. Take the remaining $250,000 and split it with half buying gold (I don't care what, gold's not as much of a turn on to me as silver) and the other half buying silver. The silver portion would be split 4 ways: 1/4 ASE, 1/4 silver Maples, 1/4 silver Philharmonics and 1/4 90% junk.

There you go. 2 cents worth on $500,000 worth.

Keep stacking and if you inherit $500,000 stack it really high!

[93_Confirmed]

I would buy a new extended cab, four wheel drive pickup truck..........made entirely of silver.

Nope, just kidding. I would take half of it and buy some land. Take the remaining $250,000 and split it with half buying gold (I don't care what, gold's not as much of a turn on to me as silver) and the other half buying silver. The silver portion would be split 4 ways: 1/4 ASE, 1/4 silver Maples, 1/4 silver Philharmonics and 1/4 90% junk.

There you go. 2 cents worth on $500,000 worth.

Keep stacking and if you inherit $500,000 stack it really high!

That's a good point. You need some extra land to bury all of those PMs caches!

[fasteddy]

I have been into silver/coin since before the 1980 run up...I don't want to wait another 30 years for silver to spike. So I would...

...take my 500k and buy two Ford GT's...the way those cars are going up in value I surely would want to be on that value ride.

Anyway can you blame me...

FE

[Engineer]

I wouldn't put everything into one asset or class. It would go towards trading pairs which tend to move opposite each other. Half toward PMs, with the other half toward home builders would be a good start.

[hobo finds]

Lets say, you came into a rather large sum that you wanted to buy PMs with. As an example lets say, $500,000.

In today's market, how would you invest? It doesn't really look like the Boyz are done looking for the bottom, so the prices could go down, potentially another 20-25% And it is also possible that it really is now close to the bottom, and prices could go up, even into moonshot territory.

Would you dollar cost average for several weeks or months, spending a set portion of the cash each time? Doing that, would you have some plan to change quickly if prices started going north rapidly?

It seems like dropping the entire wad in one go today, may not be the smartest move. What do the smart people have to say?

Why that much in PM's? I know you are here so yes PM's are important! I am sure you would not put everything into PM's that you have. You are correct money that you get while it may seem as a blessing can also be a challenge. If you can buy the bottom or close to for PM's and hold it for your kids that would seem the way to go for me.... as I am sure they will go higher in the future!

[beauanderos]

It would go towards trading pairs which tend to move opposite each other.

or you could just buy silver... it's supposed to go up, but keeps going down

[Treetop]

If I was to put 500k into PMs, maybe 10-20% of this would have ZERO paper trail. besides maybe a cryptic encoded pirates map for relatives should I go down first.

[Rodebaugh]

Dollar Cost Averaging is a trick that an investment broker created and it caught on because what it says is, "if it goes down you win" and "if it goes up you win".

What it really means is that your investment broker wins. I became an investment adviser specifically to see why they exist. And I can tell you it is NOT to help their clients. The rules literally dictate that you cannot help your clients. It's really quite sickening.

Look at the major players, do they buy "1% of the company" each week so they "average" their price. Not usually. They buy in NOW. They strike. They research their deal so they know their odds of winning are GREAT and then they strike. You don't get to OWN companies by "dollar cost averaging".

Naturally the major players don't always buy EVERYTHING but whatever they do they consider "on its own merits". They don't say to themselves, "well I bought at a higher price last week so this is a great deal. Or I bought at a lower price last week so this is great because my previous investment went up." They consider each deal "on its own merits".

So if you, through your research have determined that now is a good entry point then enter at the level your gut tells you. That might be 100% that might be 1%. Whatever it is THAT is the investment. Each time you invest or when you sell you consider that entry or exit point "on its own merits".

If you go in thinking, "whatever the price is and whatever my feeling is today I ALWAYS buy $x on Tuesday" you definitely won't be in competition with those that consider each deal by itself.

Excellent post Barry.

Opportunity drives the deal for the business minded. Acquisition is just a byproduct of profit pursuit.

[Recyclersteve]

It is hard to even attempt to give an answer with limited info. You mentioned $500k going into silver. Is this because there is substantial other money in real estate, the stock market, etc.- along with a rainy day slush fund of cash? Also, you haven't said anything about your time horizon and profit expectations. If you said a 20-50% profit in 2-5 years would be acceptable, that's one thing. But if you said you needed to double your money in two years, that would be putting a lot of undue pressure on you. If you spent $500k now, and silver went down another 20% very quickly, how would you react?

I'm asking some questions that are difficult to answer, but if YOU were the expert advising someone else, what would you say? Also, act like you don't even have the $500k at all. Without the $500k, if you are living paycheck to paycheck, then putting the whole amount into any one investment could be a stressful situation. Also, another factor to consider is upcoming bills (medical, education, etc.).

Very complicated situation to evaluate!

[IdahoCopper]

Thank you for all the good advice. It gives me a lot of points to ponder.

What are some good ideas for income-producing investments at that scale? I'd guess buying rental properties with 50% down would work out for a decent monthly income.

[beauanderos]

If you have that much to spend... take $50,000 RIGHT now and put it into the metals. TODAY.

Then take your sweet time to make further decisions.

[barrytrot]

If you have that much to spend... take $50,000 RIGHT now and put it into the metals. TODAY.

Then take your sweet time to make further decisions.

Good point. This entry point may not be PERFECT but it's pretty decent

[beauanderos]

If you have that much to spend... take $50,000 RIGHT now and put it into the metals. TODAY.

Then take your sweet time to make further decisions.

Good point. This entry point may not be PERFECT but it's pretty decent

I'm thinking if it was me... I would squirrel away $250,000 with the intent not to touch it until all investment opportunities had been thoroughly
investigated. The other $250,000? Put $50,000 to work today, and divide the remainder evenly. You now have two lumps of $100,000. Divide the
first one however you want, maybe four tranches of $25,000 each, with the intent to DCA maybe every two weeks. Hold onto the last $100,000...
and only spend it if their is a gigantic waterfall plunge at some point. Me? I would go in 66% to 75% silver as the GSR favors it. You could also go
100% silver and then swap into gold down the road.

Wish I had your problem Heck, I consider myself fortunate just to have picked up a single BU 1/10 gold AGE for $122 shipped today

[mrrosado]

Those numbers are too big for me to even imagine. If I were to win the lotto I guess I would buy monster boxes of ASES. I would also buy an awesome silver chalice with Diamonds. I would probably give a lot of it away so I'm the wrong person to post here :0). I'm happy when I find a silver nickle.

[IdahoCopper]

I'm thinking if it was me... I would squirrel away $250,000 with the intent not to touch it until all investment opportunities had been thoroughly
investigated. The other $250,000? Put $50,000 to work today, and divide the remainder evenly. You now have two lumps of $100,000. Divide the
first one however you want, maybe four tranches of $25,000 each, with the intent to DCA maybe every two weeks. Hold onto the last $100,000...
and only spend it if their is a gigantic waterfall plunge at some point. Me? I would go in 66% to 75% silver as the GSR favors it. You could also go
100% silver and then swap into gold down the road.

Thanks Ray. This seems like sensible advice.

[wolvesdad]

Ive never looked at dollar cost averaging the way you described it. I've looked at as: when I buy on a dip or plunge or just as the price starts to move up, I wont always get it right. But as long as my average is a decent #, then, overall, my silver investment is well positioned. Id say any DCA under $24/oz on a scale of 100oz or larger is a fairly decent position. Buy more now to improve the DCA if you can afford it. (Ie, at least 3months living expenses in cash and use whats above that for silver, etc)
Buying anything on a monthly or bi-weekly, or yearly basis, without seeking the best buy-in time each time or considering other investments if they are better at that time, is stupid.

[fansubs_ca]

Where the GSR is right now, anything I put into metals at this moment I'd go all silver.

If I was buying a huge multi-hundred thousand dollar amount I'd likely break it up,
though that's not entirely dollar cost averaging. The logistics of recieving and
storing that much would be a bit involved. Idealy you don't want to get so much
at once that there is a really obvious Brinks truck showing up anywhere. Smaller,
more anonymous packages to a P.O. Box (multiple maildrops maybe?) by
registered mail would be better to avoid drawing attention to yourself. (Also
if you did put it all into silver that is about a ton right now. ^_-)

If I wanted to speed up the purchase process because of how the potential price
movement looked at the time I'd look into doing at least part of the purchase in
non-physical form. The most solid options in that area would be:

http://www.silverbulliontrust.com
and
http://sprottphysicalbullion.com/sprott ... ver-trust/

As of the exact moment I'm writing this it doesn't seem that urgent to do all of
your purchase right away (you might get a lower price on at least some of it by
spreading it out over time) but as you said that can change quickly.

As for rental property it would be more dependant on what's available and your
ability to fill it with reliable tenants. If you think your OK with running it putting
part of the money there would be good but I wouldn't leverage it and I wouldn't
go "all in" on rentals. If you do run rentals you pretty much have to increase
what you keep for a "cash float" for contingencies. Even if you have reliable
tenants, suprise repairs can come up or wider economic disruptions around the
time property tax is due could trip you up if you don't have a plan B.

Myself, if I got a windfall of sufficient size I would probably buy one or two
rental properties sometime soon but that's because I know two very reliable
guys that currently live in apartments and I know if I bought a place for cash
I could profitably rent them a better place than they have now for the same
rent they are paying now. Who you know may have a bearing on how
worthwhile rentals are to run. (If a tenant is a jerk there are far too many
ways to be jerky... -_- Disclaimer, after writing that and considering the
bussiness you are in I should clarify that this is not a recommendation to
make Jerks into Jerky. )

This thread reminds me that I've maybe put _too_ much thought into what to
do if I won the lottery. ^_-

[beauanderos]

This thread has caused me to recognize that I have had a problem for years... since 2003. I like to spend money, therefore I am a workaholic. Now then, it doesn't make any difference
that the items I spend on increase in value... I still have an addiction to buying. I see items posted and I feel this compulsion to buy them (that is, if they're things I want, listed at fair
pricing)... and yet, I feel no satisfaction in receiving them. I sometimes leave purchases in boxes for months, even years. It's not the actual stacking that feeds me, it's the act of
buying stuff. Life can be a lot less stressful when you aren't constantly scheming on how to pay for something. And if you understand this about yourself (that no matter what "the deal"
is, there will always be another) then maybe you can begin to hope to get a grip on things. However, understanding that you have an issue, and fighting the feelings of compulsions that
assail you when you see more coins listed (that you just GOTTA have) doesn't make it any easier. I sometimes am in agony wanting to pull the trigger, and have to rationalize all the
reasons above to walk away... the only thing that saves me is when I've procrastinated just long enough that someone else snaps up the deals.

So, yeah, I've given this some thought too... but in reverse. I agree with the three month emergency fund. When times are good and silver and gold are at least reliably going sideways,
if not strongly advancing, then it doesn't make a difference if you just liquidate some metals if cash needs arise. But when the bastards are doing what they've been up to for the last
three years, then it becomes prudent to recognize that the rules of the game have changed and take appropriate steps. For me, that now means building an emergency fund from scratch
(as ALL discretionary income always used to be instantly converted to silver or gold prior to this) and doing so means that I need a plan. The LAST thing I want to be forced to deal with is
having to come up with emergency cash by liquidating into this suppressed market.

What I've come up with is similar to what I suggested earlier, but in reverse. I actually have to give myself pep talks, reprogram my brain into thinking "Fiat is Good!" (some, anyway) and
thus I now "bank" about 90% of my excess cash each payday, but will allow myself perhaps that ten percent or more of play money to get a pissy little fix if absolutely necessary from a great
listing from christostock immediately following another spot price plunge. And, as has invariably happened in the past too many times to count, as soon as I have committed to a mouth-watering
deal from him, the little devil lists something even more savory that then permeates me with buyer's remorse.

At least this way, I can now weigh more choices to select from. As I am now building a reserve fund, it also allows me the discretion of picking up the rare below-market bargains that someone
else who didn't manage their strategy optimally is forced to post (you know who you are). If I see something like that, I can act instantly without having to contemplate how I'm going to juggle
expenses so that I'll be able to afford it, and I can PM immediately. You have to, if you want to win those listings. Because if you wait ten seconds they're gone.

Meanwhile, the emergency pot is growing larger gradually, and if the bastards continue their take down to even greater depths... sub $16, sub $15 (even as pessimistic as I am after years of
suffering paper losses from these guys, I don't thing they're going to be able to push it down under $14) then I am placed in the more enviable position of having a large supply of dry powder
on hand to utilize on fresh targets, rather than just drooling from the sidelines, kicking myself over missed opportunities.

[silverstacker]

This thread has caused me to recognize that I have had a problem for years... since 2003. I like to spend money, therefore I am a workaholic. Now then, it doesn't make any difference
that the items I spend on increase in value... I still have an addiction to buying. I see items posted and I feel this compulsion to buy them (that is, if they're things I want, listed at fair
pricing)... and yet, I feel no satisfaction in receiving them. I sometimes leave purchases in boxes for months, even years. It's not the actual stacking that feeds me, it's the act of
buying stuff. Life can be a lot less stressful when you aren't constantly scheming on how to pay for something. And if you understand this about yourself (that no matter what "the deal"
is, there will always be another) then maybe you can begin to hope to get a grip on things. However, understanding that you have an issue, and fighting the feelings of compulsions that
assail you when you see more coins listed (that you just GOTTA have) doesn't make it any easier. I sometimes am in agony wanting to pull the trigger, and have to rationalize all the
reasons above to walk away... the only thing that saves me is when I've procrastinated just long enough that someone else snaps up the deals.

So, yeah, I've given this some thought too... but in reverse. I agree with the three month emergency fund. When times are good and silver and gold are at least reliably going sideways,
if not strongly advancing, then it doesn't make a difference if you just liquidate some metals if cash needs arise. But when the bastards are doing what they've been up to for the last
three years, then it becomes prudent to recognize that the rules of the game have changed and take appropriate steps. For me, that now means building an emergency fund from scratch
(as ALL discretionary income always used to be instantly converted to silver or gold prior to this) and doing so means that I need a plan. The LAST thing I want to be forced to deal with is
having to come up with emergency cash by liquidating into this suppressed market.

What I've come up with is similar to what I suggested earlier, but in reverse. I actually have to give myself pep talks, reprogram my brain into thinking "Fiat is Good!" (some, anyway) and
thus I now "bank" about 90% of my excess cash each payday, but will allow myself perhaps that ten percent or more of play money to get a pissy little fix if absolutely necessary from a great
listing from christostock immediately following another spot price plunge. And, as has invariably happened in the past too many times to count, as soon as I have committed to a mouth-watering
deal from him, the little devil lists something even more savory that then permeates me with buyer's remorse.

At least this way, I can now weigh more choices to select from. As I am now building a reserve fund, it also allows me the discretion of picking up the rare below-market bargains that someone
else who didn't manage their strategy optimally is forced to post (you know who you are). If I see something like that, I can act instantly without having to contemplate how I'm going to juggle
expenses so that I'll be able to afford it, and I can PM immediately. You have to, if you want to win those listings. Because if you wait ten seconds they're gone.

Meanwhile, the emergency pot is growing larger gradually, and if the bastards continue their take down to even greater depths... sub $16, sub $15 (even as pessimistic as I am after years of
suffering paper losses from these guys, I don't thing they're going to be able to push it down under $14) then I am placed in the more enviable position of having a large supply of dry powder
on hand to utilize on fresh targets, rather than just drooling from the sidelines, kicking myself over missed opportunities.

Great self discovery and realization. I have similar impulses as I'm sure all of us do at some point. Except I open my packages immediately when I get them I have also begun to pull back from the amount that I was spending not even 2 months ago. It's also funny that you mention Chris. His deals are so good that it's very difficult not to pick up something. As we speak I have a box being filled .

It's disappointing that the market goes down and I'm reducing my overall spend (Chris gets a pass). Many of the posts that I read have discussed the amounts they would spend if such a moment like today ever happened again and prices were at current levels. Well here we are....and now we're reducing spend. Maybe out out of fear of an even lower spot price or maybe like myself an understanding that diversification needs to be re- evaluated and percentages need to be switched around a bit.

Thanks for sharing Ray!

[68Camaro]

Hmmm, well that's some honest talk. No judgment from here - knowing ones weaknesses is always key, and we all have them. Agree that elements of it apply to many of us - I certainly get that "shopping fix" by picking up a deal, but one thing I've ensured that I've done is redirect a fair amount of that fix into non-PM shopping. Food, ammo, supplies, other preps, etc. It's all a type of insurance, and all a type of investment. And yes, having some cash around is part of the insurance.