Your instant 5-share resources portfolio

Some commodities have taken a setback. Now is your opportunity to grab a hold of these top resources stocks.

a woman

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

News Flash: Commodities are volatile.

Gold, copper or iron ore it's all the same. The price of each fell hard in recent weeks but it doesn't matter. Because it's simple, if you don't like volatility, don't buy into resource stocks.

When prices fall dramatically (it's a matter of when, not how) don't rush out in a panic and sell all of your stock holdings. It's a recipe for disaster.

Instead, use the volatility to your advantage. Buy shares when they're down, not up. For example, you could buy any one of these five stocks at a cheaper price today than one-month ago and they're still the same companies they were 28 days ago.

For example, Rio Tinto Limited (ASX: RIO) fell along with the price of iron ore, it was worse hit than its more diversified rival BHP Billiton Limited (ASX: BHP) because of its reliance on the steelmaking ingredient. In the midst of the commodities selloff, both companies' CEOs took to the public stage and played down fears of a price collapse, dismissing concerns over a slowdown in demand for steel from Asia. They said it was temporary and, sure enough, they were right.

Resources March
Source: Google Finance

Also in the limelight were gold miners, who until recently had healthy upwards trending share prices. However, if you checked your profit and loss account today after purchasing shares in miner Silver Lake Resources Limited (ASX: SLR) only one month ago, you would be unpleasantly surprised by the 33% drop in value. That drop has come on the back of relatively little news, making an investment in Silver Lake Resources today a better one than a month ago.

Despite the huge demand for oil and gas, the share prices of two promising mid-cap stocks primed for growth have also retracted. Both Senex Energy Ltd (ASX: SXY) and Drillsearch Energy Limited (ASX: DLS) have operations in our countries busiest onshore oil and gas basin, the Cooper Basin. In addition each company is busy growing record profits on the back of healthy production increases. In the last month, shares are down 3% and 5%, respectively.

Foolish takeaway

"A study of economics usually reveals that the best time to buy anything was last year." – Soccerwidow.com

Now is a better time than a month ago to invest in resource stocks. The industry will continue to be volatile and no one can accurately predict short-term fluctuations in price. But, as an investor, we can use the market's sentiment to make intelligent decisions.

Motley Fool Contributor Owen Raszkiewicz does not have a financial interest in any of the mentioned companies.

More on ⏸️ Investing

Close up of baby looking puzzled
Retail Shares

What has happened to the Baby Bunting (ASX:BBN) share price this year?

It's been a volatile year so far for the Aussie nursery retailer. We take a closer look

Read more »

woman holds sign saying 'we need change' at climate change protest
ETFs

3 ASX ETFs that invest in companies fighting climate change

If you want to shift some of your investments into more ethical companies, exchange-traded funds can offer a good option

Read more »

a jewellery store attendant stands at a cabinet displaying opulent necklaces and earrings featuring diamonds and precious stones.
⏸️ Investing

The Michael Hill (ASX: MHJ) share price poised for growth

Investors will be keeping an eye on the Michael Hill International Limited (ASX: MHJ) share price today. The keen interest…

Read more »

ASX shares buy unstoppable asx share price represented by man in superman cape pointing skyward
⏸️ Investing

The Atomos (ASX:AMS) share price is up 15% in a week

The Atomos (ASX: AMS) share price has surged 15% this week. Let's look at what's ahead as the company build…

Read more »

Two people in suits arm wrestle on a black and white chess board.
Retail Shares

How does the Temple & Webster (ASX:TPW) share price stack up against Nick Scali (ASX:NCK)?

How does the Temple & Webster (ASX: TPW) share price stack up against rival furniture retailer Nick Scali Limited (ASX:…

Read more »

A medical researcher works on a bichip, indicating share price movement in ASX tech companies
Healthcare Shares

The Aroa (ASX:ARX) share price has surged 60% since its IPO

The Aroa (ASX:ARX) share price has surged 60% since the Polynovo (ASX: PNV) competitor listed on the ASX in July.…

Read more »

asx investor daydreaming about US shares
⏸️ How to Invest

How to buy US shares from Australia right now

If you have been wondering how to buy US shares from Australia to gain exposure from the highly topical market,…

Read more »

⏸️ Investing

Why Fox (NASDAQ:FOX) might hurt News Corp (ASX:NWS) shareholders

News Corporation (ASX: NWS) might be facing some existential threats from its American cousins over the riots on 6 January

Read more »