Monthly gold and other precious metal purchasing programs are a great way for investors to achieve portfolio diversification and hopefully increase the earnings on their precious metal investments. By signing up to such an accumulation program, an investor can let a team of professionals manage the purchases made on their behalf and look after the bullion that is acquired.
How Monthly Gold Purchase Programs Work
By subscribing to this investment strategy, an investor can take all the hard work out of acquiring bullion in a bid to diversify their portfolio and achieve a low average purchase price. Once signed up, an investor simply decides upon the amount they would like to invest each month, which could be as low as $35 in some programs such as JM Bullion’s Automatic Investment Program. That amount is then taken from their bank account automatically and used to purchase the precious metals of the investor’s choice.
The investee will buy as many units of the investors chosen product that can be purchased by the pre-set monthly amount. These products could be specific gold bars, silvers coins or platinum bars.
How This Can Result in a Low Average Purchase Price
As some months the price of precious metals will be high, while in other months the price will be lower, the physical amount purchased each month can vary. On months with a high price, the monthly investment amount might only cover one or two coins while on other months, when prices are lower, it might cover a whole bar of precious metal.
The aim of this practice is to achieve a lower total cost per unit, giving the investor a lower overall purchase price for their chosen precious metals. Over time there is a high likelihood of a low average purchase price being reached. This is called dollar cost averaging and is a practice used in many different types of investment, not just in precious metals.
By buying precious metals in this way, there is a high chance, that after an extended period you will have accumulated more bullion than you would have done if you’d invested the same amount of money but spent it in one go. This is because as the price goes up and down over time, an investor usually ends up with a larger amount of gold or silver due to the price dips.
However, if the metals or stocks an investor was buying was only going up in price, this would not be the case and there would be no advantage to joining a monthly purchasing program. But as precious metals do go up and down in price, this is a great way to acquire them.
Who are Monthly Purchasing Programs For?
Monthly purchasing programs like the one offered by JM Bullion are ideal for those who want to invest a relatively small amount each month on a consistent basis. For investors who don’t have large amounts of cash in reserve available to invest in bullion at one time, investing smaller amounts over a longer period of time allows them to still make a substantial investment in gold or silver over time.
Those who are unsure about investing in precious metals can use a monthly purchasing program to test the waters and find out how simple it is to start investing in gold and other precious metals. By setting a small minimum purchasing amount, a monthly program such as this a great way to slowly accumulate precious metals over time.