Resources stocks are not designed to be reliable, utility-like investments. The prize – and substantial risk – of exposure to commodities’ inherent volatility is leverage. Buy at the right time, and few asset classes or sectors can match the gains. Conversely, investors who have watched the miners’ share price convulsions in recent years might be tempted to avoid the sector entirely. But for readers taking this latter course, we'd suggest pondering copper producer Central Asia Metals (CAML), one of Aim’s gems, and the closest thing to a bond proxy you will find among mining equities.
IC TIP:
Buy
at
218p
Tip style
Income
Risk rating
Medium
Timescale
Medium Term
Bull points
Rising copper price
Bear points
Limited growth
Single project risk