Issue link: http://resourceworld.uberflip.com/i/423464
D E C E M B E R / J A N U A R Y 2 0 1 5 www.resourceworld.com 27 times per day unless you are a trader and your expectations are for short term capital gains. Even so, placing trading stop orders at different price levels would allow you to buy or sell shares in accordance with your investment strategy. Checking a stock often makes sense when a press release disclosing material facts that would have a bearing on the stock price is expected and a quick decision must be made to lock in profits. Still, when it comes to timing entry and exit points, one should consider the life cycle of the resource company as it relates to their main asset. One should buy in the pre-discovery and discovery stage and sell in the feasibility stage. Then, get back in during the development (after the company receives funds from institu- tional investors) and start-up stage, and sell when commercial production has been achieved, commodity prices are support- ive and the market considers that the asset has reached full maturity and investment value. Generally speaking, an exploration company's share price is less sensitive to commodity price swings than shares of a producing company. Investing in an IPO could be attractive but you won't get in unless you are either an insider or you are an institutional inves- tor and an appreciated customer of the investment bank or underwriter. Still, in those early moments nobody knows how the market is going to price the shares of a newly-listed company. Remember Facebook? Private placements could be an attrac- tive option for accredited investors. The offer is usually sweetened with warrants. This type of investment is suitable but only if you believe that the company is going to do well on a medium to long term. Investing in ETFs, which track indexes or commodities, provides investors with the diversification of an index fund, exposure to the upside potential of the underlying commodities along with the ease to openly trade its shares on exchanges. The leverage that ETFs have on commodity prices due to the large num- bers of investors looking for opportunities in the metals sector is a double-edged sword. During a bull market, ETF cash inflows accelerate with the ascent of metal prices but do the opposite during a bear market when abrupt withdrawals further deteriorate the price of the underlying commodity. As these funds emulate the price of their commodities of interest, investing in ETFs should be done when it is expected that the specific commodity and/or basket of commodities would enjoy a bright future. The same is valid for tak- ing possession of commodities; stacking or hoarding them should be done with a long term view. A large part of one's precious metals hoard should consist of coins which are easier to cash in and could be used to acquire goods in times of need. Beware, not all commodities are equal. Some of them are transparently traded on exchanges while others have their price established through direct negotiations between parties and accurate and timely information on price movements is dif- ficult to obtain. If you consider investing in commodities you should be checking on the Purchasing Managers Index (PMI). Disrupting technologies could rapidly shift the balance of supply and demand and technological advances in the min- ing and energy sectors must be closely watched by investors. These technologies do not appear overnight; however, they are discussed for years before their wide application within an industry would start influencing the production or uses of a commodity. In the case of shale oil and gas, the oversupply and corollary depressed prices were easy to forecast as in the not- that-distant past advances in directional drilling and fracking made it possible to unlock the immense energy potential of shales in the US. The oil surplus created a glut and a drastic decrease in crude prices but also created a bear market for the manufactur- ers and service providers involved in the