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Friday, 7 May 2021

Decided to increase my precious metals regular savings plan and diversify metals

As I already have a regular monthly transfer of cash into my Perth Mint Depository online account, and the first monthly $100 gold purchase was processed as expected, I decided to increase my monthly transfer to $200, and to setup a second automatic bullion purchase for $100 of silver each month. The change increases the annual allocation to $2,400 (which is still only about 0.08% of my NW, or about 8% of my overall savings rate). As there is a flat 0.50% transaction fee it doesn't increase costs to make two $100 purchases rather than a single $200 purchase each month, and diversifying across both gold and silver means that I'm exposed to 'precious metals' as an inflation hedge without caring if the gold:silver price ratio varies over time (which it does).

It is slightly more expensive to invest in silver than gold in terms of the buy/sell spread (about .5% for gold and about 1.35% for silver), but  investing in a combination of gold and silver the average buy/sell spread of 0.9% + 1% 'round trip' transaction fees isn't too bad compared to other investments. 

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