Subscription arrangements for pound cost averaging

[DrKarlMoneys]

Dollar (or pound) cost averaging is an approach used by may to accumulate a stack while reducing the impact of shocks in the price. This makes sense but I don't know of any dealers that offer a subscription to facilitate this. E.g. setup a direct debit and get a certain number of ounces of a bullion type of your choice per month.

Why does no one do this?

[AuricGoldfinger]

My guess is due to fluctuations in price? So eg 1oz a month would be a totally price different every month, or if you picked a set amount it wouldn’t be possible to fill the order to the exact penny/cent.

I dont see why they couldn’t carry over any left over money to the next months account but probably too much hassle for a dealer to do when its not major effort just to go online and make an order each month. But i do see where your coming from and im sure there would be interest if a dealer was to facilitate this!

[DrKarlMoneys]

That would be true if you gave the dealer a specific budget each month but I was thinking more along the lines of a customer committing to buying e.g. 10x 1 ounce Britannias a month and they take whatever that comes to each month from a direct debit. Same principle as if you're on a variable rate gas and electric deal and use a consistent amount each month. It would though be a sensible precaution to have a cap on the total invoice amount to guard against price spikes and adjust the number of coins as necessary.

Could be a good idea for those stacking for a pension. Just thought of it after watching a Silver Future video where he talked about buying $100 of silver each week but sometimes forgets and puts in larger orders next time to compensate. You'd have to be fairly discipled to do it consistently over a long period of time.

I know we have reps from some dealers on the forums so I'd be interested to hear their thoughts on this.

[AuricGoldfinger]

Yes thats true regarding other bills that fluctuate. I do think it would be a good thing and is a good idea i am suprised myself that no one seems to do this as i know plenty of people - if not most stack on a monthly basis. Would be nice for PMs to just appear in the post each month!

[sixgun]

 i see some people here have done deals where they buy a certain amount of gold per month from a dealer. Let's say 5 sovereigns. If they are willing to make a regular purchase they may be able to get a slightly better price.

[dicker]

I think you have something here.  Many people put something away each month but I have not found a metals investment averaging service.

I had a service where my oil heating company supplied me with oil when they thought I was running low.  Guess what...they supplied me at the time the prices were highest.  I suspect the temptation for bullion dealers would be similar. 

[vand]

I can think of several potential reasons why a dealer wouldn't do this - what if the particular coin is not in stock for example?

DCA doesn't need to be exact to the penny. Just set aside a rought %age of your income each month. If anything, try to buy a slightly larger dollar amount if the price is lower than it was last month.. round up to the nearest oz.

Prices are not so volatile that there's no solution.

Also look into Dollar VALUE averaging.. where you purposely buy more if the market has fallen, according to your desired rate of return.