Gold & Silver Equities: Hold or Take Profits?

The volatility we’ve seen in mining stocks recently is intense, and judging by the sentiment I’m seeing on Twitter, it’s getting challenging for people to navigate this market. Here are some questions that I think describe the sentiment I’m seeing:

• Is there a pullback coming?

• Should I take profits now and wait for a pullback?

• Should I sell my mining stocks?

• Does this bull market have legs to run further?

• What happens if we go into a recession?

If you invest in something like gold and silver equities when they’re being left for dead, the move from the bottom can be intense and it’s tempting to take profits too soon.

This is tricky with mining equities because they are cyclical, and you have to take profits at some point. Just look at the long-term charts of most miners, and you can see they can explode higher in some years and do nothing or slowly trend down for many years thereafter.

But on the other hand, if you hold through a period where the equities go from being left for dead to even a lukewarm market, you can get incredibly high returns, very fast. And if you sell too early, waiting for a pullback, you can lose out on a lot of returns.

For example, if you had sold out and waited for a pullback in the last months that never really came, you would have missed a huge percentage of the returns during that period, which have been very high.

To be honest, I have taken profits on some stocks but then have mostly recycled them into other gold and silver equities that I believe are more undervalued or into different commodity equities that have not done as well as gold and silver equities but I’m very bullish on.

Ultimately, I’m not really interested in selling too much here when these stocks are still incredibly cheap, only to potentially buy in at 20% lower prices. Rather, I’m in this for the medium to long term and am trying to sit on my hands until the stocks that I own get anywhere close to where I think they’re fairly valued.

Therefore, I’m careful not to pay too much attention to whatever people are forecasting for the short term and balance the info I consume each week with something that reminds me how far there is still to go in these equities.

While I still believe there are great opportunities out there to allocate capital, especially if we get a pullback, the game is quickly changing into “when do you take profits vs. hold.” I am still very comfortable holding these equities for now and taking small profits, even through a pullback. Sure, that might be a mistake, but I think at this point the bigger mistake is just not participating in the up move.

Thanks for reading!

Disclaimer: This article is for informational purposes only and does not constitute investing advice. Please consult with a qualified financial advisor before making any investment decisions.