Precious Metals Stocks
Is investing in precious metals a good idea? No. It’s a great idea. Precious metals include gold, silver, platinum and paladium. Gold and silver are the most common and are mined all over the world. When the presence of precious metals is suspected in a property, core samples of the rock are taken to laboratories. Once the existence of a precious metal is confirmed, purity and volumes are assessed. If the evidence shows that “there’s gold in them thar hills” the topographers and geologists are brought in. These experts determine the directions, depths and strength of the veins. Maps are then drawn up, land is leased or acquired, a deal is struck with the local governments, funds are raised and full scale mining begins.
Mining is messy business. I love precious metals but I love planet Earth more and I won’t invest in a mine that threatens important ecological areas. Costa Rica recently stopped a Canadian mining company, Infinito Gold, from destroying almost 200 hectares of pristine rainforest that’s home to five percent of the world’s species of small animals and medicinal plants. This company has a litigious history in South America when its plans are thwarted so I suspect that Costa Rica isn’t out of the woods yet (no pun intended).
Gold miners don’t have a great rep on the street either. Mark Twain is quoted to have said the definition of a gold mine is a hole in the ground with a liar standing out front. Regardless, there are many great gold mining companies to choose from with solid long term businesses whose shares have proven to be excellent investments. The valuation of a gold mine is a combination of cash, refined gold reserves above ground and unmined precious metals underground. Mining is its own sector and shares in mining companies are available for trade on any stock exchange. In addition to trading shares in individual mining companies, some of the banks have designed precious metals mutual funds which allow a purchaser to spread the risk and the rewards of the sector.
There are many wonderful and informative experts in the field of precious metals. Some of the experts I listen to are John Embry, Egon von Greyerz, and Eric Sprott. A few newsletters/websites I wouldn’t live without are the dailygold.com which offers a free newsletter as well as a paid subscription, Kingworldnews.com for all the latest interviews with the experts, Greg Weldon’s website titled WeldonOnLine.com offers a paid subscription with a free trial and Kitco.com which is free. Learn as much as you can about gold and silver. There’s a place in every portfolio for precious metals.
I’m always interested to know how you’re making out with your investing so please leave your comments below.
Thanks for visiting,
“Mine Work”: Image courtesy of Suat Eman/FreeDigitalPhotos.net
“Rain Forest Stream”: Image courtesy of Gualberto107/FreeDigitalPhotos.net
“Univer of Rows of Gold Bars”: Image courtesy of Ventrilock/FreeDigitalPhotos.net