Gold and Oil Companies - Risk Worth Taking ?
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Thread: Gold and Oil Companies - Risk Worth Taking ?

  1. #1
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    Gold and Oil Companies - Risk Worth Taking ?

    Hi,

    I am new to investing and learning the basics. As I still young, I would like to take a shot at risky investments. The money being investing is from my savings and I currently don't have any debt.

    I am seeing that there are quite a few companies down in stock prices due to low price of Gold and Oil. However, it is evident that an uptick in both of them will also make their stocks go up.

    Do you think that Oil or Gold prices will go up in short (1 year) or medium (2-3 years) term or it is better to stay away from these companies ?


  2. #2
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    Oil is in a bit of a glut problem for now and gold is highly manipulated and impossible to use any kind of analysis on.

  3. #3
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    Betting on individual sectors is very difficult to get right over the long term. You might take a stab at it and could get lucky (roll of the dice) but there's no point asking people. It's a total gamble and your guess is as good as anyone else's -- nobody knows.

    I tried similar things when I started investing. I bought sector ETFs thinking I could benefit from one sector or another rising. Sometimes it worked, other times it didn't, but after a few years I saw that I was doing worse than "couch potato" style broad index investing.

    In other words, couch potato investing (or buying a well diversified mutual fund) is boring and doesn't seem glamorous, but over long stretches of time, it will very likely outperform random bets you make based on feeling.

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  5. #4
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    The gold mining sector is certainly attractive from the point of view that cashflows are quite strong and improving (as production costs are dropping and metal prices are holding relatively steady, if not rising). The stocks themselves are at a mere fraction of levels of 5 years ago. However, they certainly can go lower, and should never be viewed as "get rich quick" schemes.

    If you're looking for someone to give you a prediction, those are a dime a dozen. However, if you plot the asset class of gold mining stocks going back to the early 1980s, you can buy the mining indexes for similar or less today (^XAU on Yahoo Finance!). So the gold mining sector is certainly a very unique opportunity in the market. The question is, can you remain solvent long enough for it to actually pay off?

    Sure, overweight the sector if you want, but don't get too carried away. Globally, less than 1% of assets are allocated to gold mining. So if you buy a plane-jane TSX index fund, like XIU these days, you will be allocated at approximately 8%, or well over 700% more than average. Turn into a nutbar with 100% of your wealth in gold stocks at your own peril.

  6. #5
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    Everybody starts risky and gets crushed.

    Build a rock solid base Canadian Div. Aristocrats either stocks/etf. Then take 10 maybe 20% and mess with this stuff.

    Making paper money is easy selling for a profit is ridiculously hard.

  7. #6
    Senior Member zylon's Avatar
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    Falling rocks are starting to get my attention.

    If Franco-Nevada (FNV) drops another 10% I may start buying.

    Assets are precious metals, other minerals, and some oil.

    http://www.franco-nevada.com/our-ass...t/default.aspx

    http://stockcharts.com/h-sc/ui?s=FNV...d=p31339048299

    $66.20 usd at time of posting.

  8. #7
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    gold & silver would be a buy around the 2008 lows

  9. #8
    Senior Member zylon's Avatar
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    Possible pump-and-dump alert on the ad.Venture exchange

    Monarques Gold Corporation. (TSX-V: MQR) is a growing junior gold company focused on becoming the leading explorer and developer of gold properties in the Val-d’Or/Abitibi gold camp in Quebec, Canada."

    "Monarques Gold is well financed and has close to $9 million in credits from Quebec’s Ministry of Energy and Natural Resources."

    http://monarquesgold.com/

    May 26, 2016
    Rob McEwen and Greg Chamandy make strategic investment in Monarques Gold Corp.


    source: http://www.4-traders.com/MONARQUES-G...75237/company/
    (Evanachan Ltd. is Rob McEwen)

    Disclosure:
    I have a small starter position (<$1k) in MQR so that I don't forget about it.


    http://stockcharts.com/h-sc/ui?s=MQR...d=p59955158348

  10. #9
    Senior Member zylon's Avatar
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    not about Barkerville

    You know you're a gold bug when ...
    upon seeing this image, you say ...
    "sweet holy jebus - nice rocks!"



    http://angrygeologist.blogspot.ca/20...rkerville.html


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