Saturday, March 23, 2013

Picking a Junior Gold Company in a Bad Market

by Richard (Rick) Mills
Ahead of the Herd

The current investment market for junior gold companies is arguably one of the worst since the United States went off the Gold Standard in 1971.
Despite the current high price of gold (and many other commodities), investors have almost abandoned the junior gold mining sector to invest in physical bullion, ETF’s, and producing companies. The value of the TSX-Venture Composite Index, shown below, is similar to what it was in the early 2000’s when the price of gold was below US$300 per ounce.
In 2013 I expect to see the equity market in the junior gold sector begin to correct itself and investors should currently be taking advantage of the investment opportunities resulting from the severely beat up junior sector. There presently exists a great opportunity for those investors who are “ahead of the herd” and want to invest in the market at or near the bottom.
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