It is normal for friends and acquaintances to regularly ask me my opinion on various investment opportunities whether it's bitcoin, gold, cannabis stocks, or the UBER IPO. At one time or another i've probably been asked about just about everything. I have learned to not give people advice, instead I will ask them why they are interested in buying whatever it is they are asking me about.

It is this line of questioning which turns the conversation around and usually has them think more deeply about why they want to invest. And if the conversation lasts long enough i'm usually able to expose that there is some element of greed that has them wanting to participate in what others have been seemingly benefiting from. Buying something because others have been buying it, the media has been talking about it, or the mailman said he made $10,000 on it last week are not good reasons to invest in something. In fact, more often than not these are reasons to run from an investment opportunity.

Fortunes are made by accumulating unloved assets at depressed valuations and waiting for these assets to move back into favor again. Over the last three months we have just begun to see the unloved precious metals mining sector receive a little bit of love for the first time in more than three years. In my estimation it is still early days for this bull market, however, I want to remind my readers to monitor your investment decision making for elements of greed.

Some good questions to ask:

  • Why am I buying this? Would I be buying this stock if gold hadn't just risen $250 OR if my neighbor hadn't mentioned how much he's made from it in the last month?
  • How much am I willing to risk and does this amount of risk make sense based upon the chart and/or the company's fundamentals?
  • If I buy now am I willing to endure a correction in the sector?
  • Do I need this money for something else in the near future? In other words do I have staying power?

I think these questions are a good start. If you can honestly answer these questions and the answers are satisfactory then you can probably go ahead and purchase that stock.

As human beings we are naturally drawn to crowd behavior. However, in order to be a good investor/trader we must learn when to swim against the crowd (most of the time), and in certain instances join the crowd and benefit from a rising tide. This is something that has taken me more than 16 years of intense study, practice, and analysis to learn, and I am still learning every single day.


DISCLAIMER: The work included in this article is based on current events, technical charts, company news releases, and the author’s opinions. It may contain errors, and you shouldn’t make any investment decision based solely on what you read here. This publication contains forward-looking statements, including but not limited to comments regarding predictions and projections. Forward-looking statements address future events and conditions and therefore involve inherent risks and uncertainties. Actual results may differ materially from those currently anticipated in such statements. The views expressed in this publication and on the EnergyandGold website do not necessarily reflect the views of Energy and Gold Publishing LTD, publisher of EnergyandGold.com. This publication is provided for informational and entertainment purposes only and is not a recommendation to buy or sell any security. Always thoroughly do your own due diligence and talk to a licensed investment adviser prior to making any investment decisions. Junior resource companies can easily lose 100% of their value so read company profiles on www.SEDAR.com for important risk disclosures. It’s your money and your responsibility.