Stock market vs precious metals

The year is over so it is time to show how my portfolio of precious metals stocks performed last year I discussed this portfolio a few times last year; for example, here or here.

Precious Metal Investments vs. the Stock Market

But before I present the appropriate figures let me remind what companies were included into this portfolio and what criteria were applied to construct it. First of all, the portfolio was launched on December 16, To remind my readers, at that time the entire precious metals sector was in its medium - term, severe bear market phase. The prevailing opinion was clear and simple: As a result, nearly nobody, apart from a few diehard gold bulls, was interested in investing in precious metals stocks.

Simply put, the precious metals market was presenting a classic buying opportunity and…I was very lucky to launch my portfolio at this gloomy moment.

Applying these criteria I selected the following picks: FNLPFFortuna Silver NYSE: FSMRichmont Mines NYSEMKT: RICClaude Resources and Newmarket Gold. In two of my picks, Claude Resources and Newmarket Gold, were acquired by their peers.

In May Silver Standard NASDAQ: SSRI completed the acquisition of Claude Resources and in November Kirkland Lake OTCPK: KGILF merged with Newmarket Gold.

I was lucky again because it was confirmation that 2 out of 5 picks were excellent mining companies that other miners wanted to own. As a result of these acquisitions I had to change the composition of my portfolio a little bit:. Now, let me show the total return delivered by my portfolio. For comparison, I have plotted the returns delivered by a few other popular instruments: VanEck Vectors Gold Miners ETF NYSEARCA: GDXVanEck Vectors Junior Gold Miners ETF NYSEARCA: Summarizing - despite the fact that the precious metals stock market encountered a severe correction in the second half ofinvesting in these stocks was pretty profitable.

What is more, I was lucky enough to beat this market by around 74 - 54 percentage points compared to GDX and GDXJ, respectively. Let me list the main factors, which, in my opinion, were standing behind this success:. Simply put, the portfolio stock market vs precious metals the market because nearly each pick beat it.

The only option market in nse was Fresnillo plc.

This pick delivered a return comparable to GDX However, Fresnillo shares were negatively impacted by Brexit and the British pound. The company is primary non employee stock options ifrs on the London Stock Exchange and its share prices are quoted in British pounds.

Hence, lower return delivered by these shares.

By the way, when measured in British pounds, Fresnillo delivered a return of This company is currently in a transition period where the majority of its mining activities are being shifted into a deeper part of the Island Gold mine, the flagship property.

As a result, due to increased development costs, this excellent miner delivered quite poor results in the third quarter of However, it is a one - off event and this year the company should be producing its gold at much lower cost than in For example, B2 Gold is constructing its fifth mine, Fekola in Mali the first gold should be poured this year.

Forexracer professional renko system free I mentioned above, Richmont is shifting its production to the lower zone of the Island Gold; the effects should be visible soon.

Forex rsi explained is putting its sixth mine, San Julian, online; this mine is scheduled to deliver I am sure that near - term catalysts add some color to these excellent miners.

I am very happy with the results delivered in by my five precious metals picks. These results were much better than the returns delivered by the broad precious metals stock market particularly by GDXJ and GDX. Unless Brexit the results could be even better Fresnillo share prices, the top pick in my portfolio, were negatively impacted by the weak British pound. In this article I discussed a few factors standing behind my success but the best motto is:.

I know, this sentence looks trivial but, applying the criteria listed in the first part of the article, the investors have some clues how to identify these excellent companies.

Last but not least. I want to continue my experiment.

In my opinion, now we are once again at an interesting point of this secular bull market in gold. Surely, nobody can be sure that the bottom is in but precious metals stocks are presenting low valuations once again. That is why I have prepared another proposal for this year. For more details on my Five Picks Portfolio, please, visit my blog.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it other than from Seeking Alpha. I have no business relationship with any company whose stock is mentioned in this article. This article discusses one or more securities that do not trade on a major U. Please be aware of the risks associated with these stocks. How I Beat The Precious Metals Stock Market Jan.

Summary The article summarizes the results delivered by my Precious Metals Portfolio.

How I Beat The Precious Metals Stock Market - VanEck Vectors Gold Miners ETF (NYSEARCA:GDX) | Seeking Alpha

I am also discussing the factors standing behind this success. The criteria I applied to construct my portfolio were as follows: Silver - if I was right and a new bull market in precious metals was just around the corner, it was silver that should have performed better than gold during bull markets in precious metals the silver outperforms gold.

Therefore two of my picks were producers with high exposure to silver. Only producers - my picks did not include any exploring company. Simply put, explorers are riskier than producers and I wanted to limit risks as much as possible. What is more, these producers had to operate at least two mines.

Debt free - debt is also risky so my top companies held either very small debt or even no debt at all with one small exception - B2 Gold. Low costs of production - my picks were low-cost producers.

Rosland Capital: Gold, Silver, Precious Metals

Catalysts - looking for the best stocks I was trying to find companies with near-term catalysts, mostly defined as a high chance for a relevant increase in production.

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