While sometimes risky, mining stocks can also be strong performers when commodity prices move up. However, due to the volatility of these stocks, Pat McKeough recommends that they only form a modest part of a well-balanced portfolio.
Canadian penny mining stocks are some of the riskiest stocks you can buy. These companies are trying to find mineral deposits that mine at a profit and such a find are exceedingly rare. Because of this, it’s even more important to look for investment quality in penny mines.
For example, we automatically rule out investing in penny mines that promote themselves too aggressively or do so misleadingly. The mine-finding effort is more likely to succeed if the managers focus on finding a mine rather than hyping their stock.
Junior mining stocks are usually smaller companies that typically take on riskier mining projects. However, if a junior mining stock is successful at finding and mining, it can mean huge returns for investors.
No matter what type of mining stocks, or other stocks you invest in, TSI Network recommends following our three-part Successful Investor strategy:
- Invest mainly in well-established, mostly dividend-paying companies;
- Spread your money out across most if not all of the five main economic sectors (Manufacturing & Industry; Resources & Commodities; Consumer; Finance; and Utilities);
- Downplay or avoid stocks in the broker/media limelight.
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NEWMONT CORP., $60.06, remains a buy for long-term growth and as a hedge against inflation. The company (New York symbol NEM; Shares outstanding: 1.1 billion; Market cap: $66.9 billion; TSINetwork Rating: Average; Dividend yield: 1.7%; www.newmont.com) is the world’s largest gold mining company....
We continue to recommend that investors allocate about 10% to 15% of their portfolio to stocks in the Resources sector. You should also stick to well-established producers, such as these three mining firms.
All three have high-quality reserves that should fuel their growth for many years to come....
MP...
LUNDIN GOLD, $55.22, is a buy. The miner (Toronto symbol LUG; TSINetwork Rating: Speculative) (www.lundingold.com; Shares outstanding: 240.4 million; Market cap: $13.9 billion; Dividend yield: 2.5%) owns and operates the Fruta del Norte mine in Ecuador....
Barrick has moved up recently, along with gold prices—now hitting new all-time highs. Meanwhile, it aims to add to its appeal by continuing to diversify into copper mining; longer term, the outlook for the red metal looks positive. Barrick is a Power Buy.
BARRICK GOLD, $28.41 is a buy. The miner (Toronto symbol ABX; TSINetwork Rating: Average) (www.barrick.com; Shares outstanding: 1.7 billion; Market cap: $48.9 billion; Dividend yield: 2.0%) is the second-largest gold producer in the world after Newmont Corp....
Barrick has moved up recently, along with gold prices—now hitting new all-time highs. The gains likely reflect growing economic uncertainty as well as easing interest rates. The latter limits the returns for interest-bearing investments and also weakens the U.S....