History has proven the stock market to be the best way to increase your wealth over the long term, but that certainly doesn't mean it's always going to be smooth sailing.
Shareholders of mining giant BHP Billiton Limited (ASX: BHP) have certainly found that out the hard way over the last 12 months. While the stock has risen 12.7% — outpacing the S&P/ASX 200 Index (Index: ^AXJO) (ASX: XJO) in that time – it has certainly been a bumpy ride.
Just take a look at this chart. Any time the stock has risen above $38, it has plummeted straight back down to around $35, giving investors further opportunities to stock up on the Big Australian's shares.
Source: Morningstar
Given how volatile the stock has been, should investors be waiting for it to fall once again before pressing the 'Buy' button? Or could it actually maintain its momentum this time and continue climbing to fresh heights?
Should you buy BHP Billiton today?
In answer to that question, it is truly impossible to say where the stock will be heading next. It could most certainly retreat towards that $35 mark again, or it could break from its recent trend and soar past $40. That's only 4% away from today's price of $38.48, so it is definitely achievable.
As Foolish (note the capital 'F') investors know, long-term investing isn't about trying to 'time the market' or save a couple of cents here and there when buying stocks. Instead, it is about buying quality companies when they are trading at reasonable prices, and then letting them compound in value over the long-term.
While it would obviously be nicer to buy the shares at an even lower price than they are trading at today, there is also a possibility that opportunity won't present itself anytime soon — if at all. At today's price, BHP presents as an attractive investment prospect and should fare well for investors over the long-term, regardless of whether it falls in the near-term or not.
The Motley Fool's number 1 dividend stock – yours FREE!
BHP Billiton is the safest bet you could make in the mining industry, given its much higher level of diversification than others like Rio Tinto Limited (ASX: RIO) and Fortescue Metals Group Limited (ASX: FMG). As it continues to focus on reducing costs and improving productivity, it could certainly make for a solid addition to your portfolio.
