With the economy struggling to bounce back since the recession of 2008 along with growing political turmoil around the world, many investors are deciding where to invest their money. Precious metals are becoming the choice for many investors as it provides an upside during economic turmoil. With higher demand for precious metals comes a higher demand for quality mining companies. If you are considering investing in mining, you may be wondering if you should invest in junior mining stocks or senior mining stocks. To give you a better idea of which would be the best investment for you, here's a look at the current market and predictions for the future when it comes to both types of mining stocks.
Junior Mining Stocks
Many strategists might advise investors to stay away from junior mining stocks because of their poor performance in the past few years. Some experts may urge you to avoid investing in the junior sector all together, but there is actually one big advantage associated with these investments—they provide the greatest upside potential! On the other hand, junior mining stocks tend to be substantially more volatile than their counterpart. From early 2011 to current day, junior mining stocks have lagged behind both the appreciation of senior mining stocks and the overall stock market. We are due for a reversal, and I believe those who are holding good junior mining stocks will be handsomely rewarded. In addition, as the outlook for gold and silver stocks continues to improve and grow, junior mining stocks could very well see a drastic upswing in the near future. My top picks in this space are: CMC Metals (TSX:V, CMB), Discovery Ventures (TSX:V, DVN), Golden Hope (TSX:V, GNH), Equitas Resources (TSX:V, EQT), MGX Minerals (TSX:V, XMG), and Cardiff Energy (TSX:V, CRS)
Senior Mining Stocks
If you are an investor who is not into risky ventures such as the junior mining sector, then senior mining stock investments may be the answer for you. This is typically because senior mining stocks are more liquid and their prices are usually subject to less volatility. To add to their appeal for both types of investors, senior mining stocks can be traded as either long-term investment vehicles or as speculative stocks depending on the buyer. According to the GFMS Gold Survey 2015
2, some of the best senior mining stocks to invest in include Barrick Gold (TSX:ABX,NYSE:ABX), Newmont Mining (TSX:NMC,NYSE:NEM), Sibanye Gold (NYSE:SBGL), AngloGold Ashanti (NYSE:AU), Goldcorp (TSX:G,NYSE:GG) and Gold Fields (NYSE:GFI).
I prefer to hold shares in junior mining stocks. The reason being is that they possess the most upside potential. Just look at the resource boom we experienced in late 2009 to early 2011 - junior mining stocks shot straight up on speculation alone. Then the pendulum swung hard the other way. I believe that we are in way oversold territory poised for a huge rebound. I remember in the late 1970’s when gold rose over $800 per ounce. Many junior mining stocks skyrocketed 100+ fold. I don’t think the senior mining stocks hold that potential if there is another gold/resource mania.
Reference
1. O'Connell, Tankard, Alexander, et al. “GFMS Gold Survey 2015”. Thomson Reuters. Web. 6 Oct. 2015.
https://trmcs-documents.s3.amazonaws.com/377d4e994bb540b286d7ccf30b81bece_20150409064951_GFMS%20Gold%20Survey%202015.pdf
With all of this to consider, please visit our site at www.JuniorGoldReport.com and sign up for your FREE newsletter and stay informed in the junior mining space.
Kal Kotecha MBA
Happy investing!
Kal Kotecha
Editor of the Junior Gold Report
email:
kal@juniorgoldreport.com
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Junior Gold Report is a website dedicated to informing the public about gold, silver, and metal companies. For Junior Gold Report's FREE newsletter, please visit the
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Kal Kotecha MBA is the editor and founder of the Junior Gold Report, a publication about small cap mining stocks that is read and enjoyed by thousands of investors. He was the editor and creator of the Moly/Gold Report, which focused on critical analyses and open journalism of companies profiting from the precious metals sector. The scope of his current activities include worldwide onsite analyses and reporting of developing companies. Kal has previously held leadership positions with many junior mining companies.
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