Shares of mining giant, Rio Tinto Limited (ASX: RIO), soared as much as 4% today before falling back slightly to trade 3.5% higher after midday.
Rio Tinto, Australia's largest iron ore miner, has experienced heavy selling pressure over the past month – falling 7% – as Europe toyed with a Grexit and Chinese shares plunged 30%.
So far this week, however, Rio Tinto's share price has been on the front foot, climbing nearly 3%.
Is it time to sell out?
Along with its key rival, BHP Billiton Limited (ASX: BHP), Rio Tinto is undeniably staring down the barrel of a lower commodity price environment in the coming years. This'll likely come on the back of waning demand for raw materials from China and increased supply from key producers, such as BHP and Rio Tinto.
Markets for iron ore, coal, uranium, copper and petroleum, are all expected to remain in a state of oversupply for at least the next one to two years. Personally, I'd say prices will remain depressed for some time yet.
Given that shares of both Rio Tinto and BHP appear reasonably priced, I wouldn't want to hold either company going into the lower commodity price environment.
Of course, both producers are low-cost, so they're unlikely to go bust.
However, if the chances of making a market-beating investment are very slim – with dividends at risk of being cut – why would anyone want to hold shares in either miner?
Why not get out now and move into other, faster growing, companies with even bigger dividends?
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