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When compiling a gold stocks list, it’s important to have a method to your madness or you could end up with disastrous results. I happen to love Canadian gold stocks. However, that’s hardly reason enough for you to bat an eye. I have my reasons for arriving at the investment decisions I make, but you need a similar methodology. The key is to be sure that you are indeed speculating, and not simply gambling. The fact that gold and silver are in a major resource bull market is not grounds to throw darts. There are hundreds upon hundreds of companies that will never amount to anything. The goal is to weed as many of those out up front as possible and keep them off your gold stocks list. My mining share market tips will help.
Gold Stocks List Based On Your Own Education and “Expertise”
I always recommend that people find trusted authorities where they can get some excellent, and credible, information. The field is far too broad for you to try to do it all on your own. In some ways, however, you can try to narrow the focus a bit by concentrating on a certain area. For example, you can choose to hone in on Canadian companies. Approximately half of all mining companies are listed on that one exchange. This provides you with a single conduit to access information. Your goal is simply to become more knowledgeable than the average person. This alone will put you light years ahead of everyone else. Do this and you will set yourself up for the biggest gains.
Gold Stocks List In A Mining-Friendly Jurisdiction
Deciding to compile a “watch-list” in Canada is wise, in part, because it is the hub of mining and miners. A gold stocks list could be compiled just of Canadian companies. Indeed, the Yukon alone provides numerous promising companies looking to land the next big mine patch. But Canada also features companies that reach out around the globe in their exploration efforts.
To top it all off, as if a host of great companies isn’t enough, Canada has a trading exchange that is quite hospitable. The regulatory infrastructure is good for creating a certain sense of security. The safe trading environment brings lots of traders, which increases volume and subsequent liquidity. Plus, even foreign accounts are often easy to use, as many brokerages grant access to foreign exchanges such as the TSX. Many of the popular U.S. companies grant some type of access to the exchange directly, if even through a different trading account.
Gold Stocks List Restricted To Canadian-Listed Canadian Miners?
Note that choosing to focus on companies trading on the Canadian exchange does not necessarily mean that you are confined to Canadian companies. Many companies seek to get listed on the Toronto exchange, as that gives their company access to a near-rabid group of resource investors.
So, when putting together a gold stocks list, it really just comes down to determining what you’re comfortable with. You can branch out with Canadian-listed companies that search for minerals and other resources worldwide. But you could also just focus on Canadian-listed companies that actually hunt down the goods inside of Canada.
Indeed, Canada has some of the most widespread and prolific natural resources anywhere. Canada actually has quite a bit of oil, which is nice as it becomes ever so clear that Western nations ought not to be dependent on middle-Eastern oil. The tar sands could actually hold about as much oil as any place on the planet. Canada, in fact, already supplies more oil to the United States than anyone.
Canada, in addition to oil, has lots of diverse resources. For instance, you’ll find more uranium coming out of Canada than any other nation. Potash is an increasingly popular ingredient for farming that seems soon to become a household name. Fertilizer, gold, and even diamonds are actively mined in Canada. You can also find a full fleet of base metals, including copper, nickel, zinc, and aluminum, and even the hunt for rare earth metals. As you can see, whatever you fancy, chances are you can find it in Canada. So, even if you wanted a myopic focus restricted to Canadian-listed companies only mining or exploring in Canada, you can pretty well find what you want.
Gold Stocks List Aimed At Sniffing Out Built-In Returns
Few people would shy away from purchasing a dollar for 80 cents. But what if your dollar faced the risk of floating down in value to just 60 cents at some point after paying 80? Would you still buy it or at least put it on your gold stocks list to keep an eye on? It seems like a ridiculous, or even fantastical, question. But the truth is that you may be able to buy a dollar for 80 cents at some point. But you might also be able to get it two weeks later for 60 cents. That is the world of resource investing.
Here’s how it works. There’s something out there referred to as efficient market hypothesis. What this essentially means is that we assume that the “market,” or investors, take available information on a given company and “factor” it into the current market price. As a result, favorable drill results, in the case of a gold miner, can lead to that soon-to-be-produced gold being “priced into” the stocks price. The share price will be driven up in anticipation. A prime example is the way the market “priced in” future rare earth metals production to Molycorp’s share price. The company really does produce anything at the time of this writing, but the share price would suggest otherwise. The public is building that production into the price today, so it will be too late to profit on the actual news when it happens.
But something is different with the junior resource stocks, which is why they are great candidates for your gold stocks list. These are often way off the radar from the prying eyes of analysts and big-time money managers. These money managers really can’t take a sizeable stake in the companies even if they were allowed to, and would have a hard time selling a bit position to boot. So, what happens is that there are market inefficiencies that arise as these small companies are sometimes ruthlessly sold off beyond justification. I’ve even purchased companies before for less than the cash on the books. Indeed, it’s like getting a dollar for 80 cents, and then getting the gold mine for free. As you can see, putting together a gold stocks list with companies like this can stack the deck to skyrocket your portfolio in due time.
