Best of the Week
Most Popular
1. Market Decline Will Lead To Pension Collapse, USD Devaluation, And NWO - Raymond_Matison
2.Uber’s Nightmare Has Just Started - Stephen_McBride
3.Stock Market Crash Black Swan Event Set Up Sept 12th? - Brad_Gudgeon
4.GDow Stock Market Trend Forecast Update - Nadeem_Walayat
5.Gold Significant Correction Has Started - Clive_Maund
6.British Pound GBP vs Brexit Chaos Timeline - Nadeem_Walayat
7.Cameco Crash, Uranium Sector Won’t Catch a break - Richard_Mills
8.Recession 2020 Forecast : The New Risks & New Profits Of A Grand Experiment - Dan_Amerman
9.Gold When Global Insanity Prevails - Michael Ballanger
10.UK General Election Forecast 2019 - Betting Market Odds - Nadeem_Walayat
Last 7 days
Why Record-High Stock Prices Mean You Should Buy More - 20th Nov 19
This Invisible Company Powers Almost the Entire Finance Industry - 20th Nov 19
Zig-Zagging Gold Is Not Necessarily Bearish Gold - 20th Nov 19
Legal Status of Cannabis Seeds in the UK - 20th Nov 19
The Next Gold Rush Could Be About To Happen Here - 20th Nov 19
China's Grand Plan to Take Over the World - 19th Nov 19
Interest Rates Heading Zero or Negative to Prop Up Debt Bubble - 19th Nov 19
Plethora of Potential Financial Crisis Triggers - 19th Nov 19
Trade News Still Relevant? - 19th Nov 19
Comments on Catena Media Q3 Report 2019 - 19th Nov 19
Venezuela’s Hyperinflation Drags On For A Near Record—36 Months - 18th Nov 19
Intellectual Property as the New Guild System - 18th Nov 19
Gold Mining Stocks Q3’ 2019 Fundamentals - 18th Nov 19
The Best Way To Play The Coming Gold Boom - 18th Nov 19
What ECB’s Tiering Means for Gold - 17th Nov 19
DOJ Asked to Examine New Systemic Risk in Gold & Silver Markets - 17th Nov 19
Dow Jones Stock Market Cycle Update and are we there yet? - 17th Nov 19
When the Crude Oil Price Collapses Below $40 What Happens? PART III - 17th Nov 19
If History Repeats, Gold is Headed to $8,000 - 17th Nov 19
All You Need To Know About Cryptocurrency - 17th Nov 19
What happens To The Global Economy If Oil Collapses Below $40 – Part II - 15th Nov 19
America’s Exceptionalism’s Non-intervention Slide to Conquest, Empire - and Socialism - 15th Nov 19
Five Gold Charts to Contemplate as We Prepare for the New Year - 15th Nov 19
Best Gaming CPU Nov 2019 - Budget, Mid and High End PC System Processors - 15th Nov 19
Lend Money Without A Credit Check — Is That Possible? - 15th Nov 19
Gold and Silver Capitulation Time - 14th Nov 19
The Case for a Silver Price Rally - 14th Nov 19
What Happens To The Global Economy If the Oil Price Collapses Below $40 - 14th Nov 19
7 days of Free FX + Crypto Forecasts -- Join in - 14th Nov 19
How to Use Price Cycles and Profit as a Swing Trader – SPX, Bonds, Gold, Nat Gas - 13th Nov 19
Morrisons Throwing Thousands of Bonus More Points at Big Spend Shoppers - JACKPOT! - 13th Nov 19
What to Do NOW in Case of a Future Banking System Breakdown - 13th Nov 19
Why China is likely to remain the ‘world’s factory’ for some time to come - 13th Nov 19
Gold Price Breaks Down, Waving Good-bye to the 2019 Rally - 12th Nov 19
Fed Can't See the Bubbles Through the Lather - 12th Nov 19
Double 11 Record Sales Signal Strength of Chinese Consumption - 12th Nov 19
Welcome to the Zombie-land Of Oil, Gold and Stocks Investing – Part II - 12th Nov 19
Gold Retest Coming - 12th Nov 19
New Evidence Futures Markets Are Built for Manipulation - 12th Nov 19
Next 5 Year Future Proof Gaming PC Build Spec November 2019 - Ryzen 9 3900x, RTX 2080Ti... - 12th Nov 19

Market Oracle FREE Newsletter

$4 Billion Golden Oppoerunity

Portfolio Allocation to Precious Metals- How to Invest $100,000

Portfolio / Resources Investing May 14, 2008 - 11:23 AM GMT

By: Dudley_Baker

Portfolio For the last two days, I attended and participated in the Hard Assets Investment Conference in New York City which was well attended with many great speakers and companies. I always encourage investors to attend these conferences to get a real ‘hands on feel', after all, it is your money. Meet the management, ask questions and visit newsletter writers. I would have to say, the consensus was that investors should not expect gold and silver prices to rise for perhaps the next several months and that the markets are still very vulnerable to a decline in gold into the upper 700's. That said, prices are consolidating within the long-term bull market and investors need to exercise patience and continue to seek out excellent companies and deploy their investment dollars as opportunities present themselves.


This is the last of 3 articles in our mini-series of “How to ‘Invest' with…..In our first piece , we asked if the investor with only $5,000 to $10,000 of investment capital was to be left out of this bull market? We provided several ideas for investors to consider.

In our second article, “ How to ‘Invest' with $25,000 to $50,000 ” we were able to increase our investment choices for investors.

In this last piece, “How to Invest with $100,000”, once again we expand upon our recommended investment choices but strongly suggest you read the previous articles for more of our comments.

First, a few overall comments; while the more investment dollars you have to invest in this natural resource sector provides you with more choices and flexibility this does not necessarily mean you will make more money or have a better return on your investments. In other words, the more dollars you have to invest, you will tend to allocate more funds to conservative positions like physical holdings. Based on our guidance, an investor with limited funds must take more risk and if we are correct that the junior mining shares and/or their warrants will soar in the coming months and years, then these investors will have the greatest return on their investments. Thus, investors, in a position to take on more risk may wish to consider our views in the first article , regardless of the amount of their investments.

Now let's get on to suggestions for those investors with $100,000 and more to invest in this natural resource and commodities bull market.

We would suggest that these investors place more investment dollars initially into cash reserves of 20% and increase physical holdings to 30%.

Initially, we would allocate $100,000 as follows:

Cash 20%

Bullion – coins or bars in your possession 30%

Large cap mining shares, their long-term warrants 20%

or LEAPS, if warrants are not available

Junior mining shares or their long-term warrants 30%

The cash reserves of 20% we suggest be deployed over the next several months in the junior mining or their long-term warrants, many of which have remaining lives of over 3 years.

Our opinion and as well as numerous newsletter writers and analysts is that silver will outperform gold and thus we would suggest your physical holdings be in silver coins, bars, 10 oz. and 100 oz.

Building on the previous articles, we would suggest you be ‘fully-invested' no later than August or early September with a final portfolio allocation of:

Physical holdings - bullion 30%

Large cap mining shares, warrants or LEAPS 20%

Junior mining shares or their long-term warrants. 50%

As we stated in the previous articles, the junior mining shares as a group have greatly under performed and we expect a major rally in the coming months and thus want a significant amount invested in the shares, warrants or leaps of at least 8 or 10 of these companies.

Again, it is essential for readers to have a brief overview and understanding of options, leaps and warrants, the use of which can greatly increase your investment returns, so here is some good basic information.

Options and leaps trade on the Chicago Board Option Exchange ( CBOE ). They are a contract giving you, the investor, the right, but not the obligation, to purchase the underlying security at a specific price and expiring on a specific date in the future. Call options may have a life of 30 days to 1 year, while leaps may have a life of up to 2 years. Your loss is limited to your investment for these contracts and no margin is used. The potential gains are great, if you are correct in your timing and company selection.

Warrants are slightly different in that warrants trade like a stock and are issued by a company usually in an initial public offering or in a financing arrangement. Many sophisticated investors are not aware that there are many warrants trading. While it is very common for warrants to be issued in private placements, particularly in the mining sector, these warrants do not trade and thus cannot be purchased. What is of particular interest is there are numerous warrants trading which have a remaining life of 3 years or more.

Think about the possibility of a long-term warrant on one of your favorite resource companies with several years of time remaining which is why we consider long-term warrants to be an investment not speculation.

Warrants will provide you with the opportunity to participate in this bull market with time on your side, a much lower cost than purchasing the common shares and the power of leverage working for you. As with options and leaps, your potential loss with warrants is limited to your cost and there is no margin.

In summary, investors with limited resources to invest can have a stake in this bull market and the opportunity for incredible gains by considering the use of options, leaps and warrants. Actually, I have recently purchased some call options on a large silver company which did not have warrants trading. I am investor first and seek out the best opportunities whether that is acquiring the common shares, options, leaps or warrants.

For subscribers to our service, we provide a table of all resource companies with options, leaps and warrants which are currently available to assist you with making your investment decisions.

We invite you to visit our website , view and listen to our new video tutorials , spend some time in learning center and sign up for our free Monday email, The Warrant Report.

Dudley Pierce Baker
Guadalajara/Ajijic, México
Email: info@preciousmetalswarrants.com
Website: PreciousMetalsWarrants

Dudley Baker is the owner/editor of Precious Metals Warrants, a market data service which provides you with the details on all mining & energy companies with warrants trading on the U. S. and Canadian Exchanges. As new warrants are listed for trading we alert you via an e-mail blast. You are provided with links to the companies' websites, links to quotes and charts, tips for placing orders and much, much more. We do not make any specific recommendations in our service. We do the work for you and provide you with the knowledge, trading tips and the confidence in placing your orders.

Disclaimer/Disclosure Statement:PreciousMetalsWarrants.com is not an investment advisor and any reference to specific securities does not constitute a recommendation thereof. The opinions expressed herein are the express personal opinions of Dudley Baker. Neither the information, nor the opinions expressed should be construed as a solicitation to buy any securities mentioned in this Service. Examples given are only intended to make investors aware of the potential rewards of investing in Warrants. Investors are recommended to obtain the advice of a qualified investment advisor before entering into any transactions involving stocks or Warrants.

Dudley Pierce Baker Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules