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Warren Buffett Just Bought This TSX Gold Stock: Should You?
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Better Buy: Barrick Gold (TSX:ABX) or Kinross Gold (TSX:K)?
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Warren Buffett: Golden Opportunity in Barrick Gold (TSX:ABX)?
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Warren Buffett Buys Barrick Gold (TSX:ABX): Should You Own Gold or Gold Mining Stocks Today?
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Warren Buffett Is a Genius to Invest in Barrick Gold (TSX:ABX) Stock!
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What’s Next for Barrick Gold (TSX:ABX) Now That Berkshire Hathaway Is on Board?
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ALERT: Warren Buffett Bought Barrick Gold Stock — Should You?
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Has Warren Buffett Finally Changed His Stance on Gold Investing?
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Warren Buffett Amazes the Markets Again and Buys Barrick Gold (TSX:ABX)
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Warren Buffett Bets BIG on Gold … and Canada!
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Warren Buffett Just Bought Barrick Gold (TSX:ABX) Stock
Frequently Asked Questions
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Mining and mineral stocks do pose some risks investors should be aware of.
First off, the industry is highly cyclical, meaning it rises and falls with the overall economy. When the economy is doing fairly well, the market demands more minerals: buildings are going up, consumers are buying more gold, construction is consistent. When the economy falls, however, demand for minerals tends to fall with it. The cyclical nature of energy stocks makes them more volatile than, say, utilities and consumer staples.
Another risk investors should take note of is expansion. Building mines is very expensive, much more expensive than building a new corporate headquarters. In the past, mines have expanded their enterprises during strong periods of economic growth, only to launch when the economy begins to sink.
For both these reasons, it’s vital to analyze a mining company’s finances. If the company is saddled with debt, that could be an indicator it’s overextending itself, despite supposed growth.
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Mining stocks can be a great investment, however, there are some things to keep in mind before investing.
Mining stocks can be very volatile depending on economic conditions. That being said, the best Canadian mining companies have been able to generate good profit regardless of economic conditions.