Shares in a number of large and mid-cap mining stocks have been on a strong run over the past two years. In fact, we’ve seen several of them break-out sharply in the first quarter of 2019. And according to the latest figures, it’s not just price growth we’re seeing from the miners – it’s impressive dividend growth too. So is this a sector we should all be taking more seriously?
Not so fast. Mining of course is one of those highly cyclical sectors that has a habit of catching us unaware. As recently as 2015 and 2016 the whole sector fell out of favour and drastically underperformed the market. But while holding those stocks might have felt daft at the time, they’ve come racing back in the years since.
You can see this in a 10-year chart which shows the wide drawdown of the FTSE 350 mining index (blue line – consisting of 12 large-cap stocks) against the main FTSE 350 index (green line). It looks pretty brutal…
…but then over the past two years there’s clear outperformance by the big mining stocks against the index:
The…
Disclaimer: Please note all prices are for information only, they should not be relied upon for accuracy or trading. All prices quotes are based on CFD prices and are similar though not always identical to real exchange prices. STOCKTRKR or anybody connected with STOCKTRKR will not accept any liability for loss or damage arising from use of any information/commentary/charts or articles which is provided 'as is' for educational purposes only, nothing contained on this website should be considered as investment advice - please seek proper investment advice from registered financial broker or institution if you wish to trade on global markets and ensure you are familiar with the risks.
