Don't Sell Your Junior Gold Stocks Just Yet

Written By Greg McCoach

Posted July 12, 2010

Investors of junior gold stocks are still concerned about the financial world around them. And rightfully so…

Many are wondering if they should cash out of their positions while the broader markets sell off and buy back in later.

But selling off shares of all your junior gold stocks might not be the best idea right now.

And I’m going to tell you why.

The junior gold stock market can be very volatile in both directions.

It can move very quickly at times when major market events — good or bad — occur.

And what investors really need to remember is this:

In the past ten years, the junior gold stocks market has only rallied about 25% of the time, and been mostly in the doldrums for the other 75% of the time.

Right now, the junior mineral market is suffering. This is most clearly evident in the down-trending activity of the TSX Venture, which made up of about 50% of junior mineral stocks.

Since the beginning of the summer, the TSX Venture has shed almost 20%.

Take a look:


Investors have recently been moving out of junior gold stocks and in to cash over fears of a second wave of financial troubles.

Meanwhile, physical gold and silver prices remain strong, recently breaking record.

And I believe we will continue to see pulsing momentum of increased interest in the market as the world financial situation is exposed for what it really is: a house of cards.

I don’t think it’s a bad idea to raise some cash at the moment, especially on positions that you’ve made any significant money with. However, I would advise investors to stay in their core junior gold stock positions.

Personally, I have always felt more comfortable with making long-term investments. I can sleep well at night with and not worry about the short-term trends.

Successful trading takes very specific skill sets that most investors simply don’t have. This is why as a newsletter writer, I take the approach of investing over the long term for most subscribers and not worrying so much about the short-term ups and downs we go through within the markets.

As an example, I have many clients that bought gold at $300 or $400 an ounce ten years ago and were holding for the long term. They have done exceedingly well.

A good friend who traded the bullion market over that same time period recently told me he wished he had just kept his original positions and not traded. The amount of stress and worry he had to deal with as he traded the short term were a gigantic cost to him, as were the loss of profits.

The long-term trend is totally in our favor. Yes, there are always hiccups along the way — but gold and silver prices will continue to power higher and move junior gold stocks in the direction we want: up.

As the parabolic moves come when world fiat currencies fail, there will be no better place to be than gold, silver, and their respective mining shares.

If you feel like you are a good trader, then by all means go for it.

But for the average investor, I think you want to raise a bit of cash now and let the rest ride.

Good Investing,

Greg McCoach
Editor, Energy and Capital
Investment Director, Mining Speculator and Insider Alert

P.S. My colleague Luke Burgess has just published a new report on the precious metal that pays out $12,890 for every car made around the world… And with the worldwide automobile market exploding, this rarely-invested-in metal is coiled for huge price gains. Learn the secrets to this rare precious metal in Luke’s most recent report.

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