Monday, November 16, 2009

Dollar Cost Average Into Silver

Looking back at my last post on gold, I have to admit that I was wrong. Gold has overshot my $1070 target and is trading over $1140 as I write this. Good thing I didn't sell anything. I have been selling some covered calls on the way up and will sell some GG stock at various price points on the way up as well. I am surprised that gold stocks haven't been doing better than they have given the record prices in gold and relative strength of the stock market.

I have a hard time thinking about spending more than $1140 for an ounce of gold. It is not the easiest thing to sell physical gold. I don't have as difficult a time paying for GG or AUY stock, but if you want to own some physical assets, consider silver.

Silver is trading at $18 per ounce. That is a lot easier to swallow especially considering that economic times are tough, and there may not be a lot of extra cash available. It would not be much trouble to spend $50-60 every month or two and pick up a few ounces of silver. With gold being as expensive as it is, silver would be a good alternative and should do well for the same reasons that gold is rising in price.

I think it is worthwhile to purchase some asset that will maintain purchasing power over time. Given the risk of inflation with all of the nearly free money entering the circulation, it is certainly worth considering dollar cost averaging into silver.

Until next time--Keep it REAL!

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