Dollar-cost Averaging: The idea behind Investor Crate
This article is not intended to be financial advice and should not be used as such. Dollar cost averaging is an old idea commonly used in a wide range of investing. This article is meant to share with you, the idea and theory behind Investor Crate. We recommend all clients seek financial advisement from a certified financial adviser before utilizing ANY portion of our service.
Dollar-cost averaging is the idea that buying all year, despite valleys and peaks in the market price, garners you, approximately that years annual average market price. It should be clear that Precious Metals as a vehicle of investment is not as volatile as things like Crypto Currency. Although, in rare instances we do sometimes see large increases or decreases in market spot price. Events like this have been speculated and in some cases proven to be a manufactured crisis, like the case of the Hunt Brothers in 1980 when the Silver prices rose a staggering 713%.
Precious Metals have a few associated investment strategies that we have talked about in the past, but the most common is that of a long term holding. Over the years, like most anything, the value and price goes up, some relate this closely with inflation. Therefore we do not frequently see commodity ‘day trading,’ because you generally won’t see a gain of 70% over night like Bitcoin. There is also much less signals to successfully speculate increases like this in the metal market like you might find in the Stock Market. For example, you won’t see corporate earning reports, a change or death of leadership or new product release announcement that might indicate some sort of change in the market.
The theory and success behind Investor Crate
'Post Trading Stress Disorder'
Besides having such a tightly knit team that would put most companies to shame, which is comprised of over 50% of Military Veterans who value service and integrity. The idea behind Investor Crate was not to try and speculate or time the perfect moment to place a purchase order. Instead, the idea was poised to solve two issues in the Precious Metals industry.
The first issue was premiums over Gold, Silver and Platinum bullion prices. As you might know, the typical Gold Coin starts as raw ore, it then moves to a refinery, then a mint, then a retailer or broker, then into your safe or IRA account. Each time it transfer custody the price slowly rise. This is to cover the costs of mining, refining, minting and retail or broker wages. This was solved by cutting out the middleman. We go in much more depth of this process in a few of our other blogs.
The second and most important issue our service solves is dollar-cost averaging. This takes much of the grunt work out of purchasing precious metals, largely cuts out the middleman and keeps a steady flow which is priority number one. We all know the thousand-yard stare into the market ticker. Instead of giving you guys Post Trading Stress Disorder, we’ll pass that onto our purchasing department and save you the hassle.
Candlestick charts are used to show changes in a single day. If there are 20 trading days in a month, there will be 20 candle sticks.
About Dollar-Cost Averaging
Dollar-cost averaging (DCA) is the systematic interval trading over time, similar to value trading, the idea is to minimize downside risk in turbulent and volatile markets. This is useful for a casual gold bug or silver bug in that consumption of information on the industry is cut down. It also allows you to focus on other things in your life instead of the aforementioned stare into the market abyss.
To put the idea into perspective, common investments that have this similar idea in mind are things like a 401k, IRAs and other retirement accounts. This is based on investing money as you get it and these accounts, like the commodity market, is a long-term over time investment.
Some literature and advisers will urge an investment of a lump sum but then tell you not to put all of your eggs in the same basket and have you sign a disclaimer that is about a mile long. Large sum investments by a broker generally equates to a large commission, so this will benefit the firm. Though with that said, this method is very commonly used and is used very successfully most of the time.
We will never recommend or advise which method of an investing is better, or try to analyze and decide which is the best for you. As a company, we decided long ago, that we would not speculate or sell our product using predatory persuasion techniques. We simply set out to create a fun and useful service that allows you to keep a steady flow of our favorite, shiny commodity. Enjoy!
If you liked this blog, have an idea for a blog or would like us to elaborate on something more in depth, let us know! Also, if you found this blog helpful don’t forget to share it across social media with your friends!
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Nice article, Dollar-cost averaging is a strategy in which you invest your money in equal amounts, say $250 per month, regardless of the market’s direction or a particular investment. Therefore, it is a better investment. I refer to some articles that explain well, but you did very well.
Awesome information for anybody interested this kind of investments.
I don’tbelieve dollar cost averaging is good advice for an experienced precious metals investor – a great way to loose lots of money. An experienced investor that understands the ups and downs of themarket can do so much better using their knowledge than planned buying at any price DCA.