Long-term stocks: In Focus

Three of my Recommended Long-term Investments are below. Before engaging in any stock trading, understand the risks involved. Past performance does not guarantee future results. If you are interested in trading stocks for the first-time, give me a shout and I can offer you ways to trade stocks commission-free for a month.

Today, all three of the stocks I recommend fell during trading. SLV for example dropped by a little under 5%. In the long-term, however, look at the fundamentals. Read the commentary that accompanies each stock and you will see why the current global conditions make these trades make "sense" in the long-term. I believe along with this that each of these stocks have a high probability to outperform not only paper currency but also the overall stock market.

GDX

Bottom Line: Price target $81.00. I am a buyer right now. I will be a seller at $50.

How come: Out of all three recommendations I make here, I think this is the most undervalued currently. GDX is an ETF composed of several different mining companies. The mining companies tend to “lag” the physical precious metals as far as their increase. This is since mining companies, as companies, release earnings and have their largest “swings” during these times. Precious metals are “hot”, and although GDX has increased as of late, it is lagging.

However, keep in mind that GDX is composed of companies, and every company is subject to real-life problems and in some cases catastrophes. However, since GDX is composed of several different mining companies, the impact of one company performing poorly will not impact this stock as much as holding an individual mining company stock.

SLV

Bottom Line: Price target $39.50. I am a buyer right now. I will be a seller at $25.

How come: As mentioned in my previous blog, governments are expanding the money supply by printing money. This is especially true with the U.S. government. The U.S. government also happens to have the world’s reserve currency. What does this equal? It is giving the fiat currency, the dollar, to have less purchasing power. At the same time, China and other “emerging markets” in the past two years have been trading paper money to accumulate precious metals. Both of these factors are bullish for SLV.

There has been speculation that an ounce of silver could go well north of $50 / ounce, where $50 / ounce is the historic high made in 1980 for silver. If silver goes above $40 / ounce we could see a quick move up to $50.

DIG

Bottom Line: Price target $78.00. I am a buyer right now. I will be a seller at $52.

How come: Current events in the Middle-East have been driving up the cost of oil. The media is blaming this as the sole reason why the cost of oil has been increasing. While I agree that the cost of oil is being driven up by the events in the Middle East, the real catalyst in the price increase is the money-printing that governments are engaged in. The likelyhood of the government quitting this money-printing in the near term is slim. We could see $150 for a barrel of oil by the summer. Today the price is around $100 for a barrel of oil.

Before investing in DIG, take note of what this stock actually is. DIG does not directly “follow” the price of oil; DIG is an ETF composed of several different oil companies and oil-related funds, with different weightings of each. The idea is, if the price of oil increases, then oil companies can charge more for oil, which in turn makes their profits go up.