Before picking up the pick and shovel. Stop and think for a second…
The veggie patch is no place to bury your money! Here’s why…
Earlier this week, I showed you how easily ordinary investors (like you and I) can double a $20,000 share portfolio within 10 years…
Then I provided a simple-to-follow investment strategy which could help us turn a $15,000 initial deposit into over $2.6 million in just 25 years. Talk about retirement planning!
However, despite having history on our side, what most of us struggle to do is match the returns of the market year-in year-out over the long term.
So with that in mind, if I had $100,000 to invest right now in five Australian resources stocks, here’s where it’d go.
Diversified: Rio Tinto Limited (ASX: RIO) and BHP Billiton Limited (ASX: BHP) would be in my portfolio. Although less diversified than BHP, I believe Rio’s management have the ability to turnaround the miner’s fortunes in the near future via cost-cutting and increased production outside of iron ore. BHP has a promising future in copper, iron ore, petroleum and potash. Both also pay generous dividends.
Gold & Copper: Newcrest Mining Limited (ASX: NCM) and Independence Group NL (ASX: IGO) are two superior gold miners on the ASX. Personally, Independence Group was my most recent stock purchase because I like its expanding production and nickel exposure. Newcrest, with a huge reserve life and world-class mines, is growing production whilst keeping costs extremely low.
High-Risk: Liquefied Natural Gas Limited (ASX: LNG) (“LNGL”) is Australia’s version of Cheniere Energy Inc, the US LNG liquefaction terminal and export facility owner, who grew from just $2.50 per share in 2010 to over $70 per share now. LNGL already fills a big portion of my personal stock portfolio (around 39% to be exact!) but only because the stock price gone up over 1,100% in the past 12 months (about 600% since I’ve held it).
After a massive buying spree from some of the world’s greatest fund managers and investors, LNGL stock now trades between $2.20 and $2.35 per share which has scared some investors off. However, when I originally bought the company (and recommended it to readers), I did so for its long-term potential (e.g. 2018 onwards), where I could see it possibility having a market capitalisation closer to $4 billion. Indicating a bullish 400% upside.
Our 3 best high-risk/high-reward resources stock picks – FREE!
Motley Fool Contributor Owen Raszkiewicz owns shares in Independence Group and Liquefied Natural Gas Limited.
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