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Having sold off, mining shares' risky yields are enticing

Some mining shares could be oversold but the sector is cyclical and uncertain.
Having sold off, mining shares' risky yields are enticing
  • Mining shares and investment trusts score well on screen
  • High yield is a sign to tread carefully

Exposure to Chinese demand has long been listed as a bull point for mining companies, but In the wake of the Evergrande real estate crisis,  worries about a potential collapse in demand for raw materials from China has caused the shares of many mining companies to sell off. 

Dividend yields spike when share prices fall, so are seen as a value indicator but that also means a very high dividend yield can be the sign of a value trap. Investors should bear this in mind when thinking the miners now look good value. 

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