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Dudley Baker

Dudley Baker

Dudley Pierce Baker is the founder and editor of Common Stock Warrants and its predecessor, Precious Metals Warrants and a 1967 graduate of St. Mary’s…

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Junior Mining Investing with $5,000 to $10,000

Not all investors are flush with cash to put into the natural resource sector and frequently we are asked the question, "Dudley, how much do I need to get started"?

Perhaps your $5,000 to $10,000 will not go far in buying the top companies on the NYSE or the Toronto Stock Exchange, but in the junior mining sector, you will be amazed what you can accomplish. You can actually buy thousands and thousands of shares.

We have seen some recent studies that of the shares trading on the TSX and the TSX Venture Exchange approximately 42% are trading at less than $0.10 and another 20% are trading between $0.11 and $0.19 and many of these junior mining companies are very low on cash.

Thus with 62% of the companies on the TSX and the Venture Exchange selling for less than $0.20 investors have an opportunity to get started investing in this sector with a small amount of money.

Yes, these are 'penny stocks' and the challenge is to uncover those companies which have the potential to perform well in the coming months. The risk is incredibly high but so is the potential reward.

There are some great junior mining opportunities buried in those 2,000 companies which have some cash, great properties and good management but of course the ultimate challenge is discovering the special opportunities which have the potential to make you a lot of money, possible, 500%, 1,000% or more. This can definitely be accomplished with some research, attending conferences or following some of the top newsletters in this sector.

There are also many interesting opportunities selling in the $0.30 to $0.50 range meeting our high standards which can be added to one's portfolio.

We could write volumes on how to find these opportunities but for now we would like to tell you how to invest in these shares once you have found them and will as little as $5,000 to $10,000.

First, we would spread these monies over a minimum of 4 to 6 companies. With $5,000 we would look to buy 4 positions in the junior mining sector and with $10,000 we would spread the money over 6 positions thus giving investors more opportunities as well as diversifying the risk. With the $10,000 dollars we would also include two additional companies selling at higher prices and perhaps with current production.

 

For example with $5,000:
A - silver selling at $0.05 buy 25,000 shares $1,250
B - silver selling at $0.50 buy 2,000 shares $1,000
C - gold selling at $0.06 buy 25,000 shares $1,500
D - gold selling at $0.30 buy 4,000 shares $1,200
  Total $4,950

 

 

For example with $10,000:
A - silver selling at $0.05 buy 30,000 shares $1,500
B - silver selling at $0.50 buy 3,000 shares $1,500
C - gold selling at $0.06 buy 30,000 shares $1,800
D - gold selling at $0.30 buy 5,000 shares $1,500
E - silver selling at $1.00 buy 2,000 shares $2,000
F - gold selling at $0.75 buy 2,000 shares $1,500
  Total $9,800

 

As you can see we suggest you accumulate a basket of shares each of which has the potential to make you substantial gains but with the full awareness that not all of these position may work out. If only a few shares perform well you can still make a significant amount of money on these investments.

The timing is perfect for all investors to get started in the resource sector. Most of the shares are trading at historic lows and most newsletters and analysts are expecting a banner 2013 for gold, silver and the shares. It's time for you to get in the game.

 


Visit our website, www.JuniorMiningResources.com for more information and to sign up for our email list and twitter account.

 

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