Anyone looking for stocks to buy in this market environment would be making a gargantuan mistake to overlook the resource sector. All it takes is a fundamental understand of the boom and bust cycle of the resource sector. A decent dose of familiarity with who some of the key players is will also help separate wheat from chaff. But the bottom line reality is that there is no other sector on the planet that can offer the unique upside potential as well chosen junior resource companies. Even something like silver ETF funds damper the effects of big winners because they are averaged with other less well-performing companies. Stocks To Buy And The Basics Of Resource Companies In the nutshell, you can think of the resource sector as being comprised of three different types of stocks to buy. In the beginning, you have the exploration companies. The explorers have the greatest risk and the greatest reward. These of the folks who put boots on the ground in unknown territories looking for the pot of gold at the end of the rainbow. They may spend years searching for the evasive prize. Pursuit doesn’t generate revenue. Sometimes money runs out and the party is over. Sometimes they are able to sell more shares, which in turn dilutes the potency of your holding. So, it’s important to know when to fish and when to cut bait. You can’t afford to wear out your welcome. After a discovery is made, and determined to be economically feasible, development companies help prepare the site for efficient mining activities. The development company could be a third party. It could also be the exploration outfit that goes on to develop it’s own property if it is cash rich, the deposit is superb, or it simply has failed to assemble a viable joint venture. Also, the development company could also be the company that would go on to produce the resources at issue. Accordingly, as hinted at, producers are the third type of company you can find. These are the folks who are exploiting mineral or other resource deposits and bringing the goods to market. The big producers bankroll the process of erecting infrastructure, buying equipment, and hiring the hoards of people to run it. They are safer than the other two, and fine stocks to buy, although things can go wrong. They are also less profitable. Once a producer takes over, the news is old. Often, the anticipated reserves have been “priced in†to the company’s share price to some extent. They are fine, but I prefer exploration plays. Stocks To Buy Given That Explorers Carry The Day Regardless of your position size, the beautiful thing about tiny companies is just how easily they can multiply like rabbits. Nickel shares that merely reach $1 represent a 20-fold return, or a 2,000% increase. Turning $1,000, which is easy to blow in a single-weekend shopping spree, could yield $20,000. Rather than buying a few pair of over-priced jeans, expensive shoes, and some jewelry you’ll likely never wear, you’re now looking at being able to pay cash for a car. The largest of miners may have market caps of around $200,000,000,000. What’s the chance that stock will undergo a 2,000% increase in share price? That’s why juniors are the stocks to buy.