So in the next stock market crash/GFC, assuming gold goes up as is it's supposed to being the safe haven, will the quality gold mining company stocks also go up? i.e. will they be the only "safe haven" stocks that won't get hammered in the next crash?
Gold got smashed in the GFC. It went on a bull run only a year or so afterwards. http://www.kitco.com/news/2014-10-13/2008-Financial-Crisis-Set-Stage-For-Gold-Rally.html Given that miners respond like geared investments against the spot price, you would most likely see a huge fall in mining stocks initially. Great opportunity to buy the miners in that scenario.
They probably will get smashed as investors who have bought gold miners as a hedge have to raise money to cover margin calls on other shares they've bought on leverage. The difference between a crash now compared to the beginning of the 2008 crash is where interest rates are.
What about a good gold mining company like "Brazil Resources Inc" that has a great structure and does not owe money to anyone. Will this get hammered too if a GFC happens? I'm asking because I about to buy some shares in it. It's at the 8:15 mark [youtube]http://www.youtube.com/watch?v=5GcLGGJsRrw[/youtube]
So if I see the market crashing, jump ship on my mining shares immediately? (and take the profit on the mini mining boom we are having now), and then buy back in 6 months later?
If anyone has any doubts that the PM miners are going to elevate, just look at Januarys volumes. the smart money is in at the bottom, and i never go against smart money. JMO
If you're in the green now would you want to risk it if there is no crash in the miners? If this scenario does play out I'll just use it as another buying opportunity and ride out the crash. I'll hedge my position by buying puts on the S&P or an inverse ETF. Probably won't buy puts on gold or silver though.
