Why "Fair-Weather Investing" is a Winning Strategy

There’s a buzz around the town of Baltimore and an investment story therein.

No, I’m not talking about the upcoming state fair… the start of football season… or even the “buzz” of the Navy’s Blue Angels flight squad coming to town for the celebration for the 200-year anniversary of “The Star-Spangled Banner” (written a few miles from where I type).

Nope. I’m talking about a swelling buzz that you can feel. From the streets to restaurants and bars, even at family gatherings, it’s something us Baltimoreans haven’t felt for a while… and the excitement is growing…

I’m talking about baseball.

In particular, a first-place baseball team.

At last check, the Baltimore Orioles have the largest first-place lead of any division leader in Major League Baseball. That’s a buzz-worthy change of pace here in Baltimore.

After a decade-plus of being overshadowed by big-budget rivals like the New York Yankees and the Boston Red Sox, it looks like my hometown team is setting up for some postseason fireworks — and maybe a run at the pennant.

Playoff baseball here in Baltimore? That’s much to the delight of O’s fans around town and your editor!

Ah, but I can hear it now…

“Matt, why weren’t you this excited in 2008,” the die-hards will scream, “back when the Orioles were last in their division?

“You’re just a fair-weather fan!” they’ll say.

And those die-hards would have a good point. Although I attend a handful of games every year, by no means was I excited back in 2008. The proper term would probably be disinterested, even disappointed.

But I absolutely hate that term “fair-weather fan.” It’s unnecessarily derogative.

After all, teams have up years and down years. Should fans really be as excited in those down years as in the up years? Or, taking the metaphor a little more literally, should fans really be as excited to go to a rainy-day game versus one filled with sunshine and a light breeze?

Deep down, I don’t think there’s anything wrong with being a “fair-weather fan.”

It’s not like fair-weather fans root against their team. Instead, they just wait for the right time to maximize their fan experience!

In fact, it’s the same mindset that great investors have…

Especially when it comes to resource investing, I urge you to be a fair-weather investor.

In my Daily Resource Hunter e-letter, we cover a wide range of resource sectors — most of which revolve around energy and mining. I call these our hometown sectors — gold, silver, platinum, palladium, oil, gas, uranium, coal, base metals, agricultural commodities, fertilizers and more.

Tying in to our baseball analogy above — you can think about these hard asset sectors as some of your favorite teams to root for. But just like local sports teams, these sectors are going to have their up “seasons” along with their down seasons.

In today’s market, it’s important to have a fair-weather investment strategy — after all, your money depends on it!

Let’s take a look at an example…

Over the past three years, the gold market has fallen out of favor. Gold went from a “team” with a winning record to a team that’s down in the dumps. And certainly, it would have been worth your while to put your money elsewhere.

I’m not saying we should have rooted against gold over the past three years — on the contrary. But there’s no shame in being a fair-weather investor — especially when there were greener pastures.

See, while gold was having a tough time finding a winning season, we saw huge opportunities in the U.S. oil and gas sector. Over the past three years, we’ve seen massive investment opportunity in domestic shale producers.

In that sense, there’s no shame rooting for a different hometown squad!

Luckily, I’m one of the biggest fair-weather fans you’ll meet. And I’ll be sure to keep you posted on what I believe to be the sector with the best chance to turn a profit.

So what team am I rooting for these days?

Lately I’ve had a keen eye on the short-term potential for a turnaround in precious metals and mining. While the oil and gas markets take a breather, we could be witnessing our first big moneymaking opportunity in gold in over 30 months.

That’s all I’ve got for today.

Elementary as it may seem, keeping your eye on the best fair-weather investments could be your ticket to a profitable season in 2014.

Keep your boots muddy,

Matt Insley
for The Daily Reckoning

Ed. Note: The summer may be coming to a close, but there’s still plenty of time to book solid gains this year. Sign up for the FREE Daily Resource Hunter and start receiving a variety of great investment advice including several chances to discover real, actionable stock picks. It’s one of the fastest, easiest ways you’ll ever find to help make a ton of money in the markets without spending an arm and a leg. Sign up for FREE, right here, to get started.

The Daily Reckoning