How to Buy Mining Stocks
- 1). Seek out the companies that do the most mining. Companies like BHP (Ticker Symbol-BHP), Rio Tinto (RTP) and Freeport (FCX) all come to mind. These companies deal in mining a variety of metals including copper, silver, gold and iron. They are three of the biggest names in the industry and also have very solid balance sheets.
- 2). Buy shares in a mutual fund that specializes in mining stocks. A few mining mutual funds that you might wish to consider include the Vanguard Precious Metals and Mining Fund (VGPMX), the U.S. Global Investors World Precious Minerals fund (UNWPX) and the Oppenheimer Gold & Special Minerals (OPGSX)
- 3). Buy a mining exchange traded fund (ETF). ETFs are similar to mutual funds in that when you are buying them you are actually purchasing a basket of stocks. However the major differences are that with mutual funds you will have to pay management fees and there are usually high minimum deposits to get into one. Sometimes these can be as high as $50,000. Also you can only purchase mutual funds at the end of the trading day. An ETF trades just like a stock, so you can purchase it any time during the day. Also you can buy 1 share or 1,000 shares, so there isn't a minimum investment requirement other than the cost of the share. A few ETFs that you might consider in the mining sector include the Market Vectors Gold Miners Fund (AMEX: GDX): Spider S&P Metals and Mining (AMEX: XME), Market Vectors-Coal (NYSE: KOL).
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