Right now, there’s a crazy bull market for obscure crypto currencies. Worthless coins are getting pumped “to the moon,” as speculators fear inflation and the U.S. Dollar’s decline. It may seem tempting to jump in, but what if I told you that there was a cheaper and more profitable play using the original “alt currency.” That’s right, in today’s article we’re talking about mining stocks.
For the unfamiliar, mining stocks give you a piece of an actual mine. You actually own the site where people are digging up gold, diamonds, copper, iron, and other valuable commodities.
Mining stocks are old school wealth builders, making many men like Jim Rogers and Doug Casey incredibly rich. While there’s nothing wrong with owning physical metals (my silver coins have increased significantly in value), quality mining companies turn a profit with every load of ore or gold they extract. This means their stocks can rise fast and higher than the metals themselves, while also rewarding shareholders with dividends.
Why Mining Stocks? Why Now?
As the new technologies develop, the world needs more and more metal. Copper prices are soaring due to electric vehicles, for example. Likewise, precious metals will continue to gain in value as inflation eats away at traditional fiat currency.
Here’s what legendary investor Marc Faber has to say:
Commodities are going up, and those that own them will be richly rewarded.
How To Invest In Mining Stocks?
You can buy most mining stocks through any brokerage like Fidelity or Robinhood. However, not all miners are created equal. Some companies are well established and profitable. Others are purely speculative.
Some investors love speculative miners because they can soar in value, if they hit gold or discover a mineral vein. These companies often trade for pennies (or less) and might shoot up to $3 or $5 if they’re successful.
Personally, I’m not a big fan of these since they’re highly risky.
This is opinion, not financial advice; but I believe many quality, established companies still offer incredible value. I’m up 50% in less than a year off my investment in mining juggernaut Rio Tinto. And that’s not including massive dividends.
Even with speculative miners, you can find quality and profitable companies with big growth potential. I own 150 shares of B2Gold. This is a gold mining stock that’s profitable, pays a dividend, and the cost (when I bought it) less than $5 per share.
And there are other, smarter, investors who have done much better. Glencore is something of a speculative, though established play. And its stock price almost doubled in the last six months.
Think of miners as a “sleeper bull market.” Many of these companies soaring in value, but no one is talking about this.
Conclusion
Mining stocks are a good way to invest in real, tangible businesses while also profiting from inflation.
If a recession hits or the dollar collapses, miners will surge in value. And if things stay stable, these companies will continue generating good profits and steady cash flow.
While I would recommend buying some precious metals and investing in Bitcoin too, good mining companies provide more upside potential than a gold bar. And the steady profits make these businesses better passive investments than most crypto coins (which require constant market timing).