Investing in the mining sector in an attempt to profit from the bull market in precious metals can be successful for those investors who understand the industry. Others may come up on the lucky side simply due to the overwhelming price advances of gold and silver.

In past precious metal markets, the mining company stocks have tended to move in the same direction of the underlying metals, but their volativity have far surpassed that of the metals – sometimes causing exponential price fluctuations compared to the price changes in metals.

This is largely due to the fact that investments in miners are essentially investments in the stock market. Hence, they are vulnerable to anything affecting the general economy and can move in the opposite direction of the metals, depending on circumstances.

The mining stocks are particularly vulnerable to political climates and even environmentally-motivated uprisings in countries where the companies are mining. For example, Hugo Chavez announced that he is nationalizing Venezuela’s gold miners. And in Peru, after the latest round of elections, the newly elected president, Ollanta Humala, would definitely like to have a share of the miner industries’ profits in his country, but it isn’t clear if or how that may happen. Nevertheless, just the rumors of government intervention of any kind can send a stock down dramatically.

Between the threats of government intervention or increasing mining taxes and environmental concerns, one walks a tight rope in determining companies in which to invest.

On top of these factors, the investor must decide which market-cap range is the best area of investment.

• Large Cap (Market Capitalization in Billions of dollars & well established)
• Mid Cap (Market Capitalization in high Millions of dollars)
• Small Cap (Market Capitalization in low Millions or unestablished)

Large caps can be more stable, but not have much growth potential. In fact, most large caps depend on buying up small and mid caps in order to sustain growth. Some small caps can yield huge returns. But some are risky because they can run out of cash and go belly-up before any significant find is established. The trick is knowing which ones have the greatest potential.

So it is worth repeating…if the investor doesn’t know the industry, then perhaps a better label for the activity of investment would be gambling.

But there are knowledgeable people in the industry. And one way to take advantage of that knowledge is to invest in minor-related ETFs and Mutual Funds. These types of funds hold baskets of various stocks, chosen by the funds’ management.

Below is a table of some precious metal equities, but it should be noted that these are not recommendations – each investor should initiate his/her own investigations prior to making any investments. The table is provided for informational purposes only.

Disclaimer: The author either owns, has owned, or is contemplating owning the listings in this table.

Large Caps
AEM	Stock – AgniCo Eagle Mines Ltd
EGO	Stock – Eldorado Gold Corp
GG	Stock – Goldcorp
KGC	Stock – Kinross Gold Corp
PAAS	Stock – Pan American Silver Corp
SLW	Stock – Silver Wheaton Corp
SVM	Stock – Silvercorp Metals Inc
AUY	Stock – Yamana Gold Inc
TGLDX	Mutual Fund – Tocqueville Gold
USERX	Mutual Fund – U.S. Global Investors Gold & Precious Metals
UNWPX	Mutual Fund – U.S. Global Investors World Precious Minerals
GDX	ETF – Market Vectors Gold Miners
Mid & Small Caps
CA:AMM	Stock – Almaden Minerals Ltd
CA:BYV	Stock – Bayfield Ventures Corp
CA:CGT	Stock – Columbus Gold Corp
CA:EAS	Stock – East Asia Minerals
FSM	Stock – Fortuna Silver Mines
THM	Stock – International Tower Hill Mines Ltd
CA:TWD	Stock – Trade Winds Ventures Inc
XRA	Stock – Exeter Resource Corp
AG	Stock – First Majestic
GDXJ	ETF – Market Vectors Junior Gold Miners

There are a few different ways to invest in precious metals. Each investor needs to give serious thought to these ideas and select the option(s) that best suit their own needs.

Below is a quick reference to different investment vehicles available to the average investor interested in the precious metals market.

Investment Vehicle	Description
Physical Metal	Buying physical precious metals requires the investor to take delivery of their gold and/or silver bullion in coin or bar form. This also requires self-storage (using either a home-safe or a bank safety-deposit box). Every serious precious metals investor should have at least some percentage of their entire investment portfolio in this form of physical ownership.
Online Storage	The world wide web makes it possible to do online investing as well as purchase and remotely store precious metals. For those investors that are unable to personally store their metal, this option can be extremely convenient. With the added benefits of having global access to storage facilities in the U.S., Europe and Asia, this option can also build in geographical diversification – always a good thing in today’s political climates.
ETFs	There are Exchange Traded Funds (ETF) which trade just like stocks in the stock market. These are by far the most convenient, but also perhaps a bit more volatile than the actual physical market itself. This method of investing should not truly be considered an investment in the physical metal, since delivery of the metal would be difficult for most investors.
Mining Companies	If you’re ultra-wealthy and you want to preserve that wealth, it can be extremely difficult to acquire all the physical metal your money can buy. This is mostly because hitting the market with huge buy orders can make the price spike up and upset the market. For this reason, the elite classes usually buy up their own mining companies. The smaller investor can still participate via publicly offered shares in large, mid and small-cap mining companies listed on stock-exchanges.