A Guide to Investing in Mining
The mining industry has long been criticized for processes that damage the environment. Many have demonized mining but we cannot deny its importance to social evolution. The good news is that mining companies are actually committing to cleaning and greening their processes and technologies. If you are an investor thinking of entering the mining sector, here are some vital things to know about mining investments.
What Is Mining?
Proactive Australia defines mining as the extraction of metals and minerals from the earth.
Progress and evolution of technologies often require a lot of metals and minerals. Mineral commodities are used by many industries for making products and technologies for daily life.
The next important thing to know about mining is the stages in the mining lifecycle which can allow you to better understand the risks that you will be taking in your investment. Here are 5 stages in the mining lifecycle:
- Exploration – Experts try to identify the size and value of the mineral deposit
- Assessment – Planning and designing the mine
- Development/Construction – Mine construction phase
- Production – Mine production (ore extraction, separation of minerals, disposal of waste, shipment of product)
- Reclamation – Deconstructing all facilities on the property so that the land can return to its original state
Why You Should Consider Investing in Mining
Here are the pros of investing in mining companies:
- Mining provides us with essential resources that help us progress and attain a sustainable future.
- Mining is an established industry with predictable trends and patterns that we can learn from history.
- There is an increased demand for mining and finite resources which increases commodity prices and is good for investments.
- There is potential for high returns when you choose the right companies.
Before investing, remember to do your research, seek financial advice, and pin down the type of company and resource that you would want to invest in.
Mining Stocks and Mining ETFs
Mining stocks and mining exchange-traded funds (ETFs) will expose you to the profits, losses, and discoveries of mining and exploration companies. Mining ETFs are mining stocks that you can purchase as a single share which takes away the risk of investing in a single mining company. They are usually less volatile compared to individual mining stocks and have the potential of giving you increased returns.
If you choose to buy individual mining stocks, it is important to find quality companies and look into their management/team expertise, jurisdiction, and economics.
Mining Stock Categories
When looking into the different types of miners, we usually encounter these categories:
- Juniors – Low capital exploration companies, early stage, growth stocks, high-risk high return stocks
- Mid-tiers – Bigger than juniors but not big enough to be a major, developing more than one asset and mineral, in the development and production stage, offers less risk than juniors
- Majors – Producing mines with proven methods of mining, consistent output, financially stable, multi-asset and multi-commodity
In reviewing majors, NAI suggests checking their operating track record, revenue, and regional and macroeconomic risks. Juniors that find a mineral deposit that they can mine would bring huge returns to their investors.
Different Metals & Mining Sub-sectors to Watch
Remember that mining companies have different investment propositions depending on the metal, material, or resource they are extracting. Here is an overview of the promising mining sub-sectors:
- Precious Metals and Critical Metals – High economic value, precious metals include gold, silver, platinum, and palladium while critical metals include magnesium
- Electric and Battery Metals – Used in producing battery technologies and clean energy, include lithium, uranium, rare earth metals, and graphite
- Base Metals – Inexpensive compared to precious metals, used in many industries, include copper, lead, nickel, and zinc
- Others – Include coal, oil sands, gemstones like diamonds and jade, and other commodities
There are many things to look out for when looking at mining investments, from their shares on issue, options and warrants, business plan, management’s track record and expertise, portfolio diversification, backers or investors, ability to hold up well during economic storms, and the long-term forecast for the commodity that they will be mining, among others.
Whether it be gold mining stocks, copper mining stocks, PGM stocks, silver mining stocks, uranium stocks, and so on, it is important to do your due diligence and get to know the company that you are interested in investing in by looking at its history, checking the current demand for its products and services, and seeing if it will be a good addition to your portfolio.
Gen Z Turns to Social Media for Search Rather Than Google
The ways in which the younger generation explores and consumes content are changing dramatically as the digital landscape evolves. A surprising revelation made by a Google executive recently proved how social media is becoming not only a source of entertainment but also a go-to search engine among Gen Z users.
TechCrunch reported that Google’s Senior Vice President Prabhakar Raghavan disclosed at Fortune’s Brainstorm Tech in July that a growing number of today’s digital consumers prefer searching for information on social media rather than Google Search. Raghavan revealed that based on their internal research, which surveyed people ages 18 to 24 in the US, 40% of them go to social media apps like Instagram and TikTok to watch videos to discover information. The Google exec highlighted that this has to do mainly with Gen Z’s preference for visual content.
With this latest trend, it is truly crucial for businesses to adapt to the younger generation’s way of consuming information in order to convert them into customers and investors. Gen Z will become an even more vital target market for businesses around the world in the years to come. A Bank of America Research primer revealed that the income of this generation will grow to $17 trillion by 2025. Gen Z will represent 27% of the world’s income at $33 trillion by 2030, which will eclipse the global income of the millennial generation in the following year.
The online users’ evolving way of discovering information further cements the crucial role of social media in marketing and promotions. Video content will play an immense part in influencing the purchase decisions of consumers moving forward.
To help amplify the video content game of your business, here are quick tips on how you can produce more compelling social media videos.
Know Your Audience
The first step in creating effective video content is knowing the profile of your audience. You first need to do extensive research on your target market’s online behaviors, demographics, and interests, among others, in order to produce social media videos that will be attractive to them.
There are various methods to achieve this. First, you can utilize social media listening tools and Google Analytics to extract data about your audience. Second, you can conduct online surveys to find out the pulse of your followers.
Storytelling Is King
Effective storytelling is one of the best ways to entice online users into watching your video content. Evoking emotions through a fascinating narrative is a certain way to gain views and encourage users to invest time in your content.
Your video should provide value to your audience. Will it spark inspiration in them? Will there be a key takeaway after they watch your video Ultimately, effective storytelling happens when you contribute to the internal transformation of your audience.
Grab the Attention of Your Viewers in the First Few Seconds
The millennial generation has an attention span of 12 seconds, while Gen Z only has 8 seconds. For this reason, it is essential that the first few seconds of your video grab your audience’s attention in order to keep them glued to your content.
One of the best ways to do this is to raise a question at the beginning of your video or to create a strong opening line about your topic. Sharing a statistic or data can also help spark major interest.
Educate Your Audience
Platforms like TikTok are not only social networking platforms but also learning tools. In fact, among the most popular categories on the app are educational videos covering a variety of topics like DIY, fitness, investing, and tech, among others.
Social media platforms are also a means of micro-learning, wherein information is distributed in small chunks for it to be more digestible for the learners. According to the Journal of Applied Psychology, micro-learning makes learning 17% more effective. It is no wonder a lot of the younger generation are interested in using social media to discover information and to expand their knowledge of the world.
Connect With Us
At Global One Media, we help our clients tell their stories to their audiences. We believe in the power of storytelling and utilize it to help create compelling content for the world to see.
Connect with us today and let us start your brand’s journey in the digital space.
The Future Is EV
What’s next for the automotive industry? Enter the era of electric vehicles (EVs). While we would not be expecting flying cars soaring through our skies, rechargeable cars roaming our streets would be a pretty big upgrade. You might be wondering, “Is the switch from gas and diesel-fueled vehicles to EVs worth it?”.
The Role of EVs in Decarbonizing the Planet
An analysis by the International Council on Clean Transportation (ICCT) says that the shift to battery electric vehicles (BEVs) can reduce around 65% of total lifestyle CO2 equivalent emissions and up to 83% if we entirely utilize green electricity. Unfortunately, producing EVs today generates almost 80% more emissions compared to internal combustion engine (ICE) vehicles because of battery production and the higher composition of aluminum.
According to McKinsey & Company, if we want to reduce material emissions we should consider using recycled materials in making EVs and use high-grade materials produced in low carbon or carbon-free processes. This means exploring more environmentally-friendly technologies and EV manufacturing and production processes that utilize renewable electricity. It may be a big investment for companies and consumers but it will allow us to achieve sustainability and fulfill the Green Deal aspiration.
Governments and Industries Advancing the Global EV Revolution
Governments and cities show their support for the upcoming transition to electric vehicles by introducing incentives, subsidies, and regulations to advance sustainable mobility. Countries are focusing on hitting their emission targets now more than ever. The European Union introduced its “Fit for 55” program which aims to reduce gas emissions by at least 55% by the year 2030. US President Joe Biden also set a 50% EV target by 2030.
Tesla has been dominating the EV market for years and it is an exciting time for the electric vehicle industry because famous automakers are joining the great electric car race. Audi and Volkswagen released new models with the same luxurious look and powerful engine but electric. Audi, Volkswagen, General Motors, Porsche, Bugatti, Skoda, Lamborghini, and SEAT expressed their commitment to creating new electric-powered models or making electric or hybrid versions of their vehicles.
Car rental companies are also making their move in preparation for the great EV transition. Hertz Global Holdings reportedly made a billion-dollar deal with Tesla, with the plan to purchase 100,000 EVs by the end of 2022. Hertz wants to target companies that want to reduce their greenhouse gas (GHG) emissions and achieve their environmental, social, and corporate governance (ESG) objectives.
EV Market Growth & Industry Outlook
The demand for EVs continues to grow in Europe, with the regulations implemented and high subsidies. Although there are reduced incentives for China’s EV industry, consumer pull is seen to be very strong. With the new regulations under the new US administration, EV sales are expected to grow.
McKinsey & Company predicts EV adoption to rise to 45% however, it might still not be enough to achieve net-zero emissions. Europe is expected to reach up to 75% EV market share by 2030, while China is expected to reach up to 70% of EV sales. The US is anticipated to follow Europe and China and is expected to reach 65% of EV sales by 2030, with the Biden administration setting a 50% electrification target by 2030.
In order to fully achieve our net-zero target, it is also important to decarbonize the full lifecycle of vehicles. So we then move on to the production of EV components. This shift will disrupt not just the automotive industry but also the entire supply chain. It will bring a surging demand for batteries, electric drives, and sensors. With this, Europe also plans to step up its EV battery production capacity to meet the demands.
Europe and other countries like the US want to secure a steady supply of EV battery metals like nickel, cobalt, lithium, and graphite while ensuring that companies mine and produce these metals sustainably following certain ESG goals. They are focused on securing domestic sourcing for these important metals and minerals as the EV market gains momentum.
The main goal of governments, cities and companies now is to find ways to address environmental concerns while we advance the EV transition. Imagine industries working hand in hand to secure the minerals needed to power up this shift while staying true to sustainability, ethics, environmental values and priorities, and ESG goals.
Ways to Invest in the EV Market
As the EV market continues to rise, you might be wondering how to ride its wave as an investor. So how can you trade or invest in EVs?
- Invest in EV stocks or electric car manufacturers
- Invest in auto–parts manufacturers
- Invest in mining companies or producers of battery metals and other important metals needed for EV production
- Invest in EV charging-station stocks
Social Media and Investing
Social media and technologies continue to shape and reshape modern communication. We are highly exposed to social media in our daily lives such that it all seems and feels so natural. Today, it is probably the easiest and most efficient way to get information.
However, it is important to remember that there are many advantages to social media but it also has its dangers. In a time where information is so accessible, the main challenge is information discernment. Have you ever thought of how crucial it is to acquire information from trusted and up-to-date sources, especially when making important decisions like your investments?
Social Media in Finance
For a long time, capital markets relied on analyst firms, information on stock movements, and the press as sources of information. But today, the impact and influence of social media cannot be denied. At first, the internet was able to bring together investors and firms, blurring out national boundaries. Then, forums became platforms for peer-to-peer sources of information created by individual investors. Now, we even have studies on how Google searches can help predict stock prices.
The way that information is disseminated was greatly changed when social media platforms like Twitter gained momentum, where the democratization of content happened. People were able to share their views about stocks with the public. While Twitter’s short format, incredible reach, and ability to share information promptly make it an ideal medium for sharing information on the stock market, it also has its disadvantages. Tweets can sometimes be misleading or uninformed because it is an unregulated platform.
Another advantage of using Twitter for capital markets is using it to study investors’ behaviors. Firms also use Twitter to share corporate announcements like earnings. We also cannot forget the potent role of Big Data in Finance with social media being a tool used to assess consumer satisfaction.
Is Social Media Important in Businesses?
Social media has changed how firms do investor relations. Firms look at social media feeds, check where they are mentioned, and read crowdsourced research and forecasts while complying with the Regulation Fair Disclosure (Reg FD), which requires publicly traded companies to share material and information to all investors simultaneously.
How Does Social Media Affect the Stock Market?
The world was stunned by the GameStop short squeeze where rookie investors inspired by the famous revenge plot on a subreddit drove the spike in the company’s share price which skyrocketed from $40 to $400 in a couple of days. This unravels the structural changes that are happening in financial markets and the vital role of the media and social media platforms in generating information and managing its flow. It proves that social media is growing a broader investing audience more and more.
How Do Investors Use Social Media?
According to the CNBC/Momentive Invest in You Survey in 2021, 35% of US adults use social media to look for investment ideas. While the Internet has enabled individuals to invest anytime and anywhere, using social media as a source of information can be dangerous if not done with care. With non-experts being able to easily give advice and information, financial experts recommend doing more research and background checks.
You can check out or follow financial advisors with social media presence who host live sessions and create relevant content. You can look for legitimate investment advisors through Securities and Exchange Commission sites and other similar organizations that release public information on the background of certified financial planners.
While people and influencers can share their personal experiences from which you can get advice, people’s situations are different and investments should be customized for individuals. A post or tweet that fuels your desire and enthusiasm for investing can be a good start but it is always best to take the time to do your research and consult with trusted sources and advisors before making financial decisions.
We would like to end with a quote by Peter Lynch that says, “Know what you own, and know why you own it.” as a reminder for investors to re-evaluate their portfolios from time to time and for companies to realize the power of communication to influence financial decisions and connect them to the right investors.
Are We Heading For Recession? Here’s How It Will Affect Investors
News articles, industry analysts, and thought leaders can be heard referring to hints of recession, but what is a recession? You are likely to hear the word on the news or see it online when a country’s economy is not performing well. With global, climate, and pandemic crises, you might be asking “Are we in or heading towards a recession?”
Entering the world of the stock market and investments, it is very important to be updated on the latest global news and understand how the state of economies can potentially affect businesses and investments. These are ways of equipping yourself with information to make well-informed decisions that can eventually lead you to profit or prevent losses.
What Is a Recession?
Economist Julius Shiskin identified a few rules of thumb in defining a recession, the most popular rule being two consecutive quarters with a falling GDP. From another perspective, the National Bureau of Economic Research (NBER) defines a recession as “A significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales.”
Based on history, we have learned that recessions can happen for many reasons but they are rooted in the built-up imbalances in the economy that need correction such as rising interest rates, inflation, and commodity prices.
What Happens in a Recession?
The economy is down or struggling, people lose jobs, company sales go down and the country’s economic output declines. There have been 14 recessions in the United States since 1937 (including the Coronavirus recession) and while we cannot predict if a recession is coming with accuracy and consistency, history can give us an idea about the factors that cause a recession. One thing is for certain though, and as long-term investors, we must remember. Keep your eye on the distant horizon because recessions ALWAYS end. Even the greatest recession in the history of economics ended in a few years and subsequent years saw complete revival and growth.
Causes of Recession
There are a lot of ways in which a recession can start. While it can be hard to predict it accurately, we can look into the main drivers of a recession to gauge the possibility of it happening. Here are some of the causes of recession:
- Economic shocks
- Excessive debt
- Asset bubbles
- Too much inflation
- Too much deflation
- Technological change and advancements
How Long Do Recessions Last?
A recession can last for months or a few years. U.S. Recessions from 1945 to 2009 lasted for 11 months on average, with the shortest being the Coronavirus recession which ended on April 2022.
Indicators of Recession
It is important to be ready and be able to prepare in case a recession happens. While we cannot be certain about economic forecasts, the following indicators help you anticipate an upcoming recession:
- Inverted yield curve
- Declining consumer confidence
- Drop in the Leading Economic Index (LEI)
- Sudden decline of the stock market
- Rising unemployment
What Is a Global Recession?
A global recession happens when synchronized recessions occur in many national economies due to economic shocks and impacts of recession from one country to another. This results in a long period of economic decline all over the world. With the recent global crisis, economists say that a global recession is not expected. However, higher costs and slower growth are seen.
What Are the Effects of Recession on Investors?
How does a recession affect investments and stocks? You can lose money in your investments in stocks, bonds, real estate, and other assets during a recession. If you are thinking of making stock market investments, it can be risky during a recession due to the stock market crashing. However, do not be disheartened because pulling back your investments when the economy is down is not the only answer.
You can continue your Dollar-Cost Averaging (DCA), rebalance your holdings, or hold your stocks and equity mutual funds if you are anticipating short-term market changes. Do your research to learn and understand how investments perform. Learn how to compare the gains and risks of buying stocks during a decline. The bottom of a recession is also a buying opportunity. Increase your holdings in long-term stocks which you will be able to obtain for much lower rates now.
While we can learn from how investments perform in past recessions, we cannot make short-term predictions on what will happen in the market. Hence, it can be a good idea to stick to your investment strategy even when the market is declining so you can take part in its recovery. Another thing that we can pick up from past recessions is that recessions do not last forever. Markets and economies recover from drastic downturns and sometimes emerge even stronger later on.