Discipline beats FOMO every time in commodity investing

Last week I wrote a piece for my paid readership titled:

‘From Dead in the Water to Beating the Market: The Three Elements That Changed D&D’

If you’re not familiar, ‘D&D’ stands for Diggers & Drillers, a resource-focused advisory that puts into practice what we discuss at Mining Memo.

Specific stock recommendations for different commodities. We cover the full spectrum of opportunities in this market from titanium, energy, copper, and, yes, precious metals.

That last one gets a special mention today, given the major sell-off on Friday…

If you didn’t hear, gold plunged 9% from US$5,390 an ounce to US$4,895, marking its steepest decline since the early 1980s.

Silver saw an even more dramatic collapse, dropping as much as 35% in what represents the largest intraday decline on record for the white metal.

These were historic falls. And a natural consequence of overheated speculation.

And the dramatic moves tied in nicely with what I had just warned my paid readership group about in the days prior…

My #1 Priority: Protecting Readers

You see, in recent weeks, I’ve had several readers writing in, frustrated that most of the positions in the D&D portfolio have been on hold.

Many (mostly newer) readers were anxious, eager to get involved in what I’ve described as an emerging bull market in commodities.

A definite air of ‘FOMO’ was developing. And I get to see this firsthand through reader responses, which become more erratic as markets rise.

As that happens, investors want to go ‘all-in.’ That’s a natural human emotion that I try to temper at Diggers & Drillers.

And it’s why I put out a special update last week, trying to address the FOMO clearly emerging among some of our readers (emphasis added):

…experience has shown me that buying in corrections leads to far better outcomes for our portfolio.

So, stay with me, better opportunities will come.

If you have the time, look at when D&D’s recent buy recommendations were sent to readers (all available on the website).

Those recommendations were made during corrections.

Now, look up their individual performances since these stocks were added to the portfolio… Quality stocks have a habit of bouncing back.

That’s why you need to use bad company news and market corrections (within the broader upward turning of the commodity cycle) to your advantage!

So, the most important thing I can say, right now, is to remain patient; opportunities will come.

So, why am I sharing this?

I run a model portfolio that readers can follow; it’s a key aspect of our Diggers & Drillers service.

But unlike a fund manager, I don’t invest or hold your savings. And with that, I don’t take a slab of your profits either!

Just a small annual fee that allows you to invest alongside my recommendations.

And that model has served our readers very well in recent years, delivering an annualised gain of around 25% since we launched in 2022.

But as much as I want new readers to ride our successes, I’m equally aware of the need to protect new readers from buying near major highs.

And that means holding back on issuing new recommendations when the market offers too much risk for the little reward.

Don’t get me wrong, I believe the commodity cycle is turning (upward).

But that doesn’t mean you shouldn’t be disciplined.

All bull markets have corrections, and that’s what we’re experiencing right now.

As they say, there’s never a free lunch in investing or life, even when you’re following a market that seemingly still holds years of future upside.

Corrections serve as an important reminder of why discipline matters.

That means ignoring news headlines so that you can side-step moments of euphoria.

Points of time when everyone else is ‘all-in.’

Last Thursday, I issued a sell alert to my premium members on a gold stock that had gained almost 200%.

Perhaps fortuitously.

But as this correction unfolds, I’ll have a far closer eye on opportunities.

In the weeks to come, I expect we’ll position ourselves for another excellent long-term buying opportunity in this market.

Stay tuned.