Diversify or die. I think it’s a mention of HG Wells.
Okay, okay, I know it’s really “adjusted or killed”. But if HG Wells were to manage the investment rather than the words, that bet would fit that budget into my version.
In fact, you’ve probably heard that golden nugget of investment wisdom before. It is something that all investors should be well aware of because it is the key to a successful investment.
Simple and easy: never put all the investment eggs in one basket. If the market falls below that basket, your nest eggs will save you land and spill your savings.
It’s an easy tip, I know. You might say that diversification is the smart way to go, but why should you diversify?
To that question, I have an answer today: metal mining companies.
All investors should have some exposure to miners, especially low-chapter miners, if you like to capture the subplots that most Wall Street people tend to miss.
It allows you to gain volatility in average stock prices. Especially today.
Now, many of you may say, “But isn’t that a little dangerous?”
It can be, absolutely. Any sector that sees consistent volatility (like cryptographic assets) can be a bit risky – but a large part of that risk is managed by having a plan. This protects you from making knee movements or sustaining investments for longer than necessary.
All you need is the right strategy. And if you don’t have a place, I’d say you should start looking now, as the focus has started to shine in the mining industry as the commodity market recovers.
According to a report released by PwC last year, the mining industry had a turning point in 2016. The top 40 mining companies totaled a net profit of $ 20 billion, which exceeds a loss of $ 28 billion in 2015. Meanwhile, their rating rose to 2017.
In fact, the market capitalization of these 40 companies rose 45% in 2016 to $ 714 billion.
And the good news continues for the miners.
Gold for example. Miners are particularly sensitive to rising dough prices. As gold continues to rise (and will continue to do so), gold mining stocks will rise.
It’s time to go long in this area.
In fact, since early December, VanEck Vectors Junior Gold Miners ETF (NYSE: GDXJ) has been moving away from its $ 30 support line. It has now risen by around 14.8%, a nice rally that can go further if it exceeds the current level.
All of this is to say that if you want to diversify further, miners are a great bet.