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Mining Stocks Dragged Down By Stock Market Panic

Commodities / Gold & Silver Jan 23, 2008 - 01:14 PM GMT

By: Investmentscore.com

Commodities As investors, one of our main goals is to keep various market movements in perspective. The Canadian TSX stock exchange fell over 600 points, leaving many investors with a feeling of panic. As mining equities were dragged lower in the down draft of the TSX fall, many precious metals investors questioned their decision to invest in commodities and now wonder if the bull market is over.


Although it is logical to be concerned with a 600 point drop in the major index we do not believe all markets should be lumped into one group. In other words, just because the general stock market tumbled lower it does not mean all markets are of poor value.

Unfortunately the market research of many investors consists of a quick glance at the nightly news business review which displays the various markets daily performance. It seems that once these news casts show a market such as the TSX with a large number and red arrow pointing down beside it, investors panic. It is understandable that such a short term perspective could cause concern, but what about the bigger picture?

1_gold_weekly.JPG

2_silver_weekly.JPG

In the above charts you will notice that we included the price performance of the entire bull market for both silver and gold. In doing so, a minor, one day pull back in precious metals alongside a larger pull back in Canadian stocks can be kept in perspective. Given the recent advance in the precious metals we believe a temporary break should be considered normal. The pull back in stocks may strike fear in many investors, but as precious metals investors we are less concerned and we do our best to not panic in such situations.

It is true that many of our precious metals equities have experienced price weakness recently. We must keep in mind that mining equities ultimately derive their value from the commodity they are producing or exploring for, therefore we are more concerned with the overall relative value of the commodity itself rather than short term price fluctuations of mining equities. In our opinion, long term silver and gold are still undervalued relative to other asset classes.

At www.investmentscore.com we try to keep short term market movements in perspective and seek out asset classes that appear to be of good value relative to other asset classes. To sign up to for our free newsletter and to learn more about our investment philosophies please visit us at www.investmentscore.com .

By Michael Kilback
Investmentscore.com

Investmentscore.com is the home of the Investment Scoring & Timing Newsletter. Through our custom built, Scoring and Timing Charts , we offer a one of a kind perspective on the markets.

Our newsletter service was founded on revolutionary insight yet simple principles. Our contrarian views help us remain focused on locating undervalued assets based on major macro market moves. Instead of comparing a single market to a continuously moving currency, we directly compare multiple major markets to one another. We expect this direct market to market comparison will help us locate the beginning and end of major bull markets and thereby capitalize on the largest, most profitable trades. We pride ourselves on cutting through the "noise" of popular opinion, media hype, investing myths, standard over used analysis tools and other distractions and try to offer a unique, clear perspective for investing.

Disclaimer: No content provided as part of the Investment Score Inc. information constitutes a recommendation that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person. None of the information providers, including the staff of Investment Score Inc. or their affiliates will advise you personally concerning the nature, potential, value or suitability or any particular security, portfolio of securities, transaction, investment strategy or other matter.  Investment Score Inc. its officers, directors, employees, affiliates, suppliers, advertisers and agents may or may not own precious metals investments at any given time. To the extent any of the content published as part of the Investment Score Inc. information may be deemed to be investment advice, such information is impersonal and not tailored to the investment needs of any specific person. Investment Score Inc. does not claim any of the information provided is complete, absolute and/or exact.  Investment Score Inc. its officers, directors, employees, affiliates, suppliers, advertisers and agents are not qualified investment advisers.   It is recommended investors conduct their own due diligence on any investment including seeking professional advice from a certified investment adviser before entering into any transaction. The performance data is supplied by sources believed to be reliable, that the calculations herein are made using such data, and that such calculations are not guaranteed by these sources, the information providers, or any other person or entity, and may not be complete.   From time to time, reference may be made in our information materials to prior articles and opinions we have provided.   These references may be selective, may reference only a portion of an article or recommendation, and are likely not to be current.  As markets change continuously, previously provided information and data may not be current and should not be relied upon.

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