Gold is still the hot trade. While it's not that hard to remember when gold was an afterthought, squeezed between a quick summary of bonds and commodities during financial programming, it is now a leading investment class. Whether an investor's interest in gold is fueled by fears of inflation, economic and political turbulence, its technicals, or even just a "greater fool" theory, the reality is that it has been a winning trade.
By now any investor with even a passing interest in gold knows a little something about the myriad of choices for getting in on this investment. People can choose to own actual bullion or numismatic gold, resource mutual funds, specialized ETFs like SPDR Gold Shares (NYSE:GLD), or mining stocks ... and those are just the most popular options.
Given that mining companies are the only entry on the list that can actually grow from internal strategic decisions, it is worth a look at some of the major mining companies.
A Quick View From Above
What is interesting about mining companies is that they don't necessarily track gold prices. True, they follow the same general path, but there can be notable breakouts above (and below) the price of gold as investors react to news about production, operating costs, new discoveries, and so on.
Another interesting detail is that, despite the inflationary pressures popping up around the world, most analysts still expect gold prices to peak in 2011/2012 and then decline. That could put a premium on production growth, resource growth and operating costs and there are wide discrepancies between the major miners in those variables. All things being equal, it can be more effective to own miners with high cost structures during periods of rising prices (and vice versa), although production growth is almost always welcome.
To read the full piece, please go here:
http://stocks.investopedia.
No comments:
Post a Comment