In a World of Turmoil, Where to Inves...
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Mar
24
John Murphy
In a World of Turmoil, Where to Invest?
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When major oil companies such as Royal Dutch Shell (RDS-B) and Occidental Petroleum (NYSE: OXY) are selling off assets in troubled areas according to an article in the Financial Times, investors are naturally placing a premium on stability.  The crisis in the Ukraine is making that even more important.  That is why more are turning to the natural resource sector in North America.  Publicly traded companies range in size from major oil and gold firms such as America’s Chevron (NYSE: CVX) and Canada’s Barrick Gold (NYSE: ABX), to small caps with valuable holdings such as Mondial Ventures (OTC: MNVD) and Premium Exploration (OTC: PMMEF).

Natural resource firms in North America have a number of advantages.

There is obviously the industrial demand for commodities such as oil and natural gas, among others.  That makes small caps such Mondial Ventures, with operations in Texas, as appealing as Big Oil such as ExxonMobil (NYSE: XOM).  The rising value of the underlying commodity lifts all companies in that sector.  Having holdings in North America, especially the oil rich lands of Texas, adds to the value.

It is the same with gold and silver companies.

Premium Exploration operates in the gold and silver country of Idaho.  There is a long, bountiful history for mining in that area.  Canada’s Barrick Gold, the second largest in the world, operates globally.  So does Goldcorp (NYSE: GG), the biggest on the planet.  Like oil, the price of gold lifts the price of all publicly traded companies in the sector.

Many previous articles on this site have detailed the value of natural resource stocks, especially those in North America.

The asset classes are becoming stronger.  SPDR Gold Shares (NYSE: GLD), the exchange traded fund for gold, is up 10.64 percent for 2014.  Over the same period, United States Natural Gas (NYSE: UNG), the exchange traded fund for natural gas, has increased by 15.90 percent (chart below).  Instability around the world adds to the appeal of publicly traded companies in these sectors doing business in North America.

 

 



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