Across the board, the junior mining shares were red today and, for the most part, yesterday. It’s been a straight run higher since January 18th, and many of our top stock suggestions have doubled, and then doubled again over the past 6 months. A few are even in the 500%+ territory.
No one likes to see large-percentage red days, but this is actually very healthy for a market that hasn’t let up nearly the entire year since taking off in late January. Light volume in August, combined with a market that is overdue for a correction, is what we are seeing.
The TSX Venture exchange, home to the junior resource shares, is the best-performing index in the world for 2016. After making an all-time low in early January and seeing a 5-year bear market come to an end, this entire sector has seen a wave of capital return.
There have been nearly 700 private placements since April, all of which come with a 4-month hold on shares. However, once the hold is over, investors can sell and take profits. I suspect this will definitely be a headwind for the next 2 to 3 months for the entire sector, but it will also be a great time to add to some of our favorite positions.
We are in the very early innings of a spectacular bull market that is in front of us for the resource shares. Use this time to truly review your portfolio and see which ones you are committed to, possibly selling some and buying others while we go through this small dip.