Give These 5 Sectors a Second Chance

Sector #1: Mining

The collapse of the global growth story crushed the mining sector.

Hedge funds were the key drivers in this sector helping to push stocks in the group to record levels. What goes up, though, must come down, and these stocks came down hard as the global recession deepened.

Gold, silver and copper prices have all fallen since reaching peaks last year. With the collapse, the value of companies that mine for these basic materials and precious metals collapsed as well.

Freeport McMoRan Copper & Gold (FCX), which mines gold, silver and copper, saw its shares fall from more than $100 to less than $16 in less than six months’ time last year. Much of the loss in value came about from hedge funds liquidating due to margin calls or fund redemptions.

With any economic recovery, demand for materials will increase. Such a state will make mining companies attractive again.

In addition to FCX, investors may want to send some love to Newmont Mining (NEM), Southern Copper (PCU) and Pan American Silver (PAAS).

Next: Sector #2 – Homebuilders