You see that there are many ways to speculate on the process of discovering, developing, and exploiting mineral resources.
Naturally, the higher the risk, the greater the reward when successful. If a mine is already under construction, or is in operation but being expanded, the result will be less spectacular but more reliable gains.
Which is a good thing, because it lets you choose which investment style is right for you (or maybe it's a mix of high and low risk).
Remember, natural resources stocks tend to move in sync with the price of the underlying asset. When gold, silver, or copper jumps 2%, associated stocks will often jump 5% or more -- which makes it possible for us to make multiples on our original investment.
Buy Low, Sell High.Of course the reverse is true as well: when metals and minerals prices drop, share prices in companies that produce them drop even faster, as has been happening for the last two years in the resource sector. This would be a disaster if we were talking about pet rocks, bell-bottom jeans or cars with enormous tail fins, but we're not; we're talking about things without which life as we know it would be impossible.
No Metals = Stone AgeEven if some genocidal world government were to kill nine out of every ten people alive right now, without the use of metals those left would barely be able to hang on. It's that simple. And that non-negotiable -- regardless of what some environmental extremists may fantasize. With the population of our planet getting larger every day and unlikely to stop growing anytime soon, nothing short of global nuclear war or a similar catastrophe can stop demand for metals from rising. (And if that happens, we'll have more important things to worry about than stock prices In other words: Investing in mining companies is, without question, one of the surest long-term bets you can make. That means times when metals prices "correct" -- as they are doing right now -- should be seen as buying opportunities. Buy low, sell high. It's remarkable how hard it is for even those who understand this simple, fundamental formula for speculation to actually act on it.
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