Strong First Quarter for Natural Reso...
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Apr
1
John Murphy
Strong First Quarter for Natural Resources Sector is Bullish
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For investors thinking long term, the first quarter of 2014 was very bullish for the natural resources sector.

It looks to be that way for the future, too.  SPDR S&P Global Natural Resources (NYSE: GNR), an exchange traded fund for the sector, is up for the last week, month, quarter, six months, year of market action.  Many segments in the sector performed well, too.  United States Natural Gas (NYSE: UNG), an exchange traded fund for natural gas, rose more than 15 percent for the first quarter (chart below).  SPDR Gold Shares (NYSE: GLD), the exchange traded fund for gold, is up for 2014, too.  Individual stocks in the sector ranging from blue chips like BHP Billiton (NYSE: BHP) and Barrick Gold (NYSE: ABX) to promising small caps like Premium Exploration (OTC: PMMEF) and Mondial Ventures (OTC: MNVN) are showing promise for a variety for factors.

The main reason there is economic growth around the world.

Although still recovering from The Great Recession, economic growth is picking up in many areas of the globe.  That increases the demand for natural resources are all types.  This is especially true for China.  John Ryan, Chairman of Premium Exploration, stated in an interview that the Chinese have been very active in gobbling up natural resources around the world.  A Wall Street Journal article pointed out that China has spent more than $44 billion for these assets in North America.

That is especially bullish for small caps like Premium Exploration and Mondial Ventures that have appealing holdings in North America.

The future is very bullish for the natural resources sector.  China’s spending of over $40 billion certainly manifests their need for raw materials in the decades ahead.  The Chinese have also been expending billions to establish a presence in the natural resources community of Africa, too. For investors looking long term, the future should be very rewarding in the natural resources sector.

 

 



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