By William Bancroft
As we enter the New Year only the firmest of Gold and Silver investors are holding with serene assurance, as the gold and silver prices have been trending down for a couple of months.
Gold has sold off by nearly 13% since it recovered to $1,800/ounce in early November. The mainstream media has been pronouncing the death of the gold bull market, and CNBC even suggested gold be re-rated as a risk asset.
Silver prices have also disappointed precious metal investors. Gold’s more volatile cousin has lost 20% in value from its own early November recovery to $35/ounce.
Such price drops do get us thinking, an investor can never fall idly in love with a position, but are they again part and parcel of silver investing this last 12 years?
Plenty of notable investors have made their voices heard beyond what we continue to urge are continuing bull markets for owners of gold and silver bullion. The silver price has undergone many corrections en route to gains of over 560% over the last ten years. The fundamentals driving the precious metals are stronger today than ever.
But what does this all mean for our two favourite ways to invest in gold and silver?
Averaging into gold and silver investment
Our favoured means of investing in gold and silver for most people, is for individuals to steadily buy a little each month in what would be called ‘averaging’ into a position.
Dollar cost averaging, or for UK investors, pound cost averaging, has been promoted as the best way of building a position for ages. We find the best advocacy of it by Benjamin Graham and David Dodd, the Godfathers of value investing, in their books ‘Security Analysis’ and ‘The Intelligent Investor’.
All this really means is that you invest a certain amount each month and buy gold and/or silver regardless of the current price.
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