A new ETF on the NYSE promises to track the returns of the TSX Venture Exchange in the coming years. The Global X S@P/TSX Canada ETF is currently trading at $10.58 down from a high of $16.56. Like the companies on the exchange, this ETF is speculative, however at the current price point for both the ETF and the exchange, the upside can be huge. The entire exchange has been literally hammered over the past year.
exchange, populated with small mining, energy and resource companies,
has a history of up and down volatility and if that history is any
indication, it is poised for monumental returns over the next year.
The exchange is down almost 45% over the past year.
history teaches us that, when dealing with the Venture Exchange, what
goes down, always goes up. In this case, extreme volatility can be your
very good friend. You don't buy the venture at the top. You buy it at
the bottom, or as close to the bottom as you can. I believe this
exchange is at a bottom and is poised for huge gains. If you don't like
to spend the time picking individual stocks, especially ones with this
kind of volatility, then (TSXV) is probably the vehicle for you.
A recent article at Pinnicle Digest,
details 7 significant drops in the Venture Exchange since it's
inception 11 years ago, and the subsequent recovery points. From trough
to peak, here are the numbers:
Average loss (in percentage terms) during a correction (peak-to-trough): -36.25%
Average duration of a bear market in the TSX Venture: 5.78 months
Average gain after a correction (trough-to-peak): 98.08%
Average duration of a bull market in TSX Venture: 11.83 months
The current drop of the exchange began in March of 2011 and has lasted for almost 14 months.
tracks the top 30 most liquid stocks on the Canadian Venture Exchange
and began trading in March this year. It consists of two sectors,
Materials (53.9%) and Energy (46.1%) Although most of the companies
listed in the Venture Exchange have their headquarters in Canada, their
operations span the entire globe, wherever precious metals, resources
and energy are found. The Venture is the largest "pure" resources
exchange anywhere today.
I believe this is a great way to track the
junior resource industry. I am also a speculator of a number of small
and even penny stocks on the exchange that I have been following for
some time. They represent approximately 10% of my portfolio at any given
time. (volatility is not for the faint of heart, nor for more than 10%
of your money).
Having said that, I have made some spectacular
gains on the Venture Exchange.. I believe that the exchange is now
poised for some of those gains again this year. In the mining sector, we
are at the start of drilling and excavation season. The spring is when
hope springs eternal for many small mining stocks and this year will be
no different. Some will fall short and some will find new reserves that
could change there share price in spectacular fashion.
I have bought stakes in Brigus Gold , San Gold , Alberta Oil Sands,Talison Lithium , Rodinia Lithium and Western Lithium Recently I made a purchase of:
International Lithium Corp
ILC is a small company (a penny stock trading today at .085c) with huge resources in both lithium and potash reserves. in Argentina, Canada USA and Ireland.
The venture exchange has dropped significantly over the past year and
companies like ILC have had their share prices slashed to lows never
seen before. A number of Lithium juniors have partnered strategically
with battery companies. ILC's strategic partner is Jiangxi Ganfeng
Lithium Co. Ltd of China.
About Jiangxi Ganfeng Lithium Co. Ltd.
Lithium based in Xinyu, Jiangxi Province, China, is a professional
producer of lithium products which has developed a comprehensive product
chain, including lithium metal and alloys, inorganic and organic
lithium chemicals, supplies a wide range of lithium products for primary
and secondary lithium battery market, pharmaceutical and new material
industries. Ganfeng's principal market is in China with international
exports to Europe, Japan, USA and India. "Ganfeng Lithium, as a leading
lithium downstream products producer in Asia, has recently announced in
the company's 2011 annual report USD75 million in sales revenue
representing a 34% increase over the previous year. Currently Ganfeng
consumes a significant volume of lithium raw material but taking into
account projected business growth, sourcing a future supply of lithium
becomes more and more important to support Ganfeng Lithium's core
business. The company was founded in 2000, it was listed on the Shenzhen
Stock Exchange in August 2010, notably as the first publicly listed
lithium company in China and has experienced rapid continuous growth
over the last 10 years.
"Increasing our share in ILC is part of our raw materials strategy." Wang Xiaoshen, Executive VP of Ganfeng Lithium Co., Ltd.
takes a lot of time and research to invest in individual companies,
especially juniors on a volatile exchange, so if you don't have that
time, or the inclination, then maybe you should consider TheGlobal X S@P/TSX Canada ETF for
that "speculative" portion of your portfolio.