It’s an industry with a 10,000-year history, although the story of mining started 30,000 years before that. The earth gives us all our natural resources, and if you can’t grow it, then it has to be mined. If you look at all of the commercial products in the world, most of them have been produced with minerals from the mining industry. Even the process of manufacturing those products have utilized the mining industry in one way or another.
There is no mistaking that commodity prices have been fluctuating in recent years. While gold value seems to rise, oil has recently taken the most significant fall in history. However, prices across any investment are vulnerable to sudden crashes or overnight rises. With demand for products that use mined minerals rising and an industry with such a rich history, mining is a viable area to invest in.
There have also been incredible investments and technological advancements within the industry which has strengthened its value and continues to help miners increase productivity. Companies like https://www.petrobase.io/pro/ have been working with miners to develop software that can help them source and locate gas and oil. This is just one of several ways the digital era has boosted the mining sector.
When looking at mining as an investment opportunity, you will find there are two distinct groups within the sector—the major players who are large companies similar to the large oil companies. They have multiple operations and good cash flow. These companies are easier to invest in because they are a more attractive proposition, and you can evaluate the risk a little better. The junior players are smaller companies with much less history, but they have the potential of making a much higher return. The risk is higher too as the junior player is more at risk of running out of money and failing with their mining goals. Of course, if they do hit success with the right place and right time, they will deliver a considerable return on the original investment.
Junior mining stocks would be a good choice for anyone with risk capital. But if you are looking for an alternative way of building your savings, then you should focus on the major mining stocks. This is a long term strategy that is more likely to see your money grow over the years.
Before you jump into this sector, you need to do a lot of research. Understand where the strengths and weaknesses of the industry are. Look at the predicted resources we have left within the earth. The oil industry predicts we will run out of oil within 53 years if we continue to consume it as we are. Mining of certain minerals could see the same fate. Study the patterns of this. Might that mean the commodity will become more valuable or are their advancements in technologies that could see the consumer move away from it with an alternative, human-made fuel?
The mining sector is an exciting and well established alternative investment opportunity. Get digging and do your research!