Volatile Returns: Commodity Investing Through Miners and Explorers #infographic

 

Volatile Returns: Commodity Investing Through Miners and Explorers #infographic

Gold and silver are known as safe haven investments by investors. However, companies that generate gold and silver also produce volatile returns, creating opportunities for wise investors. Uncertainty, particularly when it comes to investing in commodities, is a double-edged sword. During good times, it can produce skyrocketing returns. But during tough times, it can turn nasty. Today's Prospector Portal infographic shows us how investing in shares in precious metals can outperform or underperform the broader metals market.


Capitalising Volatility: Pacing Matters

As for other investments, timing matters for goods. Due to the complex manufacturing processes of commodities, sudden demand shocks are met for slower supply responses. In addition to other factors, this triggers commodity supercycles, prolonged upswing phases and market downswings. Investors need time in their portfolios to take advantage of this volatility, and there are several ways to do so.


The Evidence: How mining equities react to the price of metals

Not only can price increases translate into higher profits for mining companies, but exploration companies' outlook and valuation can also change. As a result, investing in exploration companies can be a great way of gaining exposure to changing prices.

That being said, these types of companies can deliver higher stock returns over a shorter period of time when prices are high, but they can also turn dramatically negative when prices are low. In the bull and bear markets for precious metals, we compare how producers and exploration companies do with a resource compliant with NI-43-101.


Exploration 's investment potential

Mining equities tend to outperform underlying commodity prices in bull markets, although they underperform in bear markets.

For mining exploration companies, these effects are even more pronounced. Exploration companies are high-risk, but they can offer high returns when it comes to investing in commodities.


Volatile Returns: Commodity Investing Through Miners and Explorers #infographic

infographic by: www.visualcapitalist.com


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