Mining Stocks: The Best Way To Invest In Metals?

I’m a big fan of commodities over the course of the next few decades. Regardless of how the US economy is doing, it’s basically inevitable that over the next half century, China and India are going to experience economic growth.

That means, iron, copper, gold, coal, silver, and other metals are going to be in demand pretty much regardless of short-term economic fluctuations. The same goes for lumber, agriculture, and most other commodities.

In the end, the economy needs stuff. Without stuff, there’s nothing — literally. It sounds simplistic, but that’s just because it is a simple perspective on the economy — and it’s simply true.

Metals Are Going to Grow

China and India are booming. And in order to boom in an economics sense, you need to have the metals to do so — metals for factories, cars, bikes, doorknobs, shovels, you name it. Large-scale economic growth requires more metals.

This growth isn’t just short-term, either — there’s a reason Jim Rogers (check out his book, Hot Commodities) and George Soros are both expecting to witness China become the world economic superpower in the next few decades: because it’s economically inevitable. They’re starting to loosen restrictions, embrace capitalism on at least a limited scale, and they have a heck of a lot of people. Economic boom is inevitable.

Why Mining Stocks Are The Best Way to Go

So what’s the best way to invest in metal? There’s always the route of investing in futures — but that’s extremely high risk, you can lose everything quickly, and is a little too speculative for me. The best route is to invest in metals through mining stocks. Here’s my reasoning:

• Dividend Investing. You get dividends. This alone is reason enough to invest in mining stocks rather than the metals directly.

• Lower-Risk Investing. It’s less risky, because there aren’t 30% price swings on a yearly basis — at least not for most stocks. It’s not low risk, just lower risk, if that makes sense.

There are more reasons, like the fact that you can actually research the management of mining companies — this means you’ll be able to pick the right mining stocks, which further increases your profits.

In the end, metals are going to go up in demand in the future, and the best way to invest in these metals is through mining stocks.