Investing in gold is a popular strategy for investors looking for a reliable store of value and a hedge against inflation. However, as with any investment, the price of gold can be volatile and unpredictable. Dollar-cost averaging (DCA) is a strategy that can help mitigate the risks associated with investing by spreading out the investment over time.
Buying gold is usually associated with buying gold coins and bullion bars, which is not something that can be paid for in small monthly instalments.
It is possible though to dollar cost average gold by investing as little as $100 per month.
In this article, we will explain what DCA is and how to invest in gold on a regular basis.
What is dollar-cost averaging (DCA)?
Dollar-cost averaging is a simple investment strategy that involves buying a fixed amount of an asset at regular intervals, regardless of the price. By purchasing a fixed amount of an asset over time, the investor is able to average out the cost of their investment. This means that the investor is not entering the market at the highest or lowest point.
Despite what investment gurus will try and tell you, no one can know when the top or bottom of a market is. Dollar-cost averaging gives you time in the market, rather than trying to time the market.
For example, let’s say an investor wants to invest $1,000 in gold. Instead of buying all $1,000 worth of gold at once, they could invest $100 every month for ten months. By using this system, the investor does not have to stress if they bought while the market was too high.
Is it possible to dollar cost average gold?
The dollar cost average strategy is simple enough for shares, where small amounts can be bought in one purchase. Gold, on the other hand, is not an investment that is typically thought of as something that can be bought in small units. When one thinks of buying gold, most people would think of 1-ounce gold coins, or gold bars that are kept in storage facilities at banks.
Gold is easy to dollar cost average by using the Auto-Invest program at BullionVault. This program allows you to automatically invest a minimum order size of $100, £75, €85 or ¥10,000.
How to Dollar-Cost Average Gold Purchases with BullionVault
BullionVault is an online platform that allows investors to buy and sell gold and silver at live market prices.
Here are the steps to DCA your gold purchases with BullionVault:
Step 1: Create an account
The first step is to create an account with BullionVault. You will need to provide some personal information, including your name, address, and email address. Once your account is created, you will need to verify your identity by submitting some identification documents.
Step 2: Fund your account
Once your account is verified, you can fund it with your desired amount. Once your bank account details are linked to BullionVault, this will be the funding source for the regular payments.
Step 3: Set up regular purchases
After funding your account, you can set up regular purchases of gold. BullionVault allows you to set up daily, weekly, or monthly purchases of gold, depending on your preference. You can specify the amount of gold you want to purchase, and BullionVault will automatically execute the trade at the live market price.
Step 4: Monitor your investment
Once your regular purchases are set up, you can sit back and monitor your investment. BullionVault provides a dashboard that shows your account balance, the value of your holdings, and the historical performance of gold. You can also make additional purchases or sell your holdings at any time.
Dollar-cost averaging is a simple and effective strategy for investing in gold. By purchasing a fixed amount of gold at regular intervals, investors can mitigate the risks associated with price volatility and average out the cost of their investment. BullionVault is a reliable platform that allows investors to easily implement this strategy and invest in gold at live market prices.
Goldscape.net is an affiliate of BullionVault. This post is provided as a guide and it not financial advice.