What is mining stocks all about?
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Mining stocks can generally be divided between the majors and juniors. The majors are typically mining companies that operate producing mines on a global scale and have proven methods for consistent output year over year. Junior mining stocks, on the other hand, are usually smaller companies and take on risky mining exploration. If a junior mining stock is successful at finding a mineable mineral deposit, it can mean huge returns for investors. Junior mining stocks offer the investor with the potential for significant growth, given the speculative nature of the investment. Junior mining also comes with higher risk.
The mining sector is popular among investors as it produces a steady stream of both previous and industrial-use metals and other raw materials. Mining companies are exposed to several unique risks including fluctuations in commodities prices, environmental factors and other factors that can affect the market. Some are less volatile and more mature. As a new investor, do your research on which one you want to go for, advice is to go for ones with lower risks.