One of the misconceptions I learned in university economics courses was that there was an inverse relationship between risk and return. The assertion was made on the premise that people would demand a higher level of return to offset a higher 'perceived' risk. There is some merit in this statement, but another factor strikes me as pertinent - the quality of the perceptions assessing market value. Consider that there are mining analysts, but they only get paid to research major stocks, so they can therefore only recommend researched stocks. There is thus an information gap. The implication is that not every market participant has a good understanding of all stocks, and some small stocks might be totally off the radar of brokers. Thus not all participants perception of the market is equal. One persons 'perception of risk' is not the same as another person's because their knowledge and experience is different. There is always a story that is poorly understood, or is just outright ignored because the market was not open to the story. This has a lot to do with personal focus, though I would discourage you from having such a fixed loyalty to one sector.
A mining analyst confronts a much smaller risk than a novice investor. A disciplined analyst has a far better understanding than an analyst whom cuts corners. An investor who has a critical mind has a better likelihood of success (or less risk) than an investor who just accepts what they have read. An investor who listens to others opinions before acting on his own, an investor who researches his stocks, and similar companies has a better risk-reward profile than an investor who doesn't. An investor who is emotion or risk-averse is likely to act on distorted thinking, and will perform worse than a trader who systematises their trades, thus acting in a mechanistic fashion.
The implication is that there is a great deal that you could be doing to reduxe your risk exposure in the market apart from listening to others when they say its too risky. In fact some of the best trades are when people are telling you to stay out of the market.
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Andrew Sheldon www.sheldonthinks.com
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Mining Stock Fundamentals - Buy this report!
You probably noticed that gold, oil and food commodities are taking off right now! You might also be pondering why gold specs have so far failed to perform, and where you should place your hard-earned cash given that we are just about to enter a protracted period of ruinous inflation. Just as we experienced in the 1970s, we are in for a sustained bull market in gold stocks. There are no better markets to buy gold stocks than Australia and Canada. American investors too can easily get a piece of the action – both in their own country, in Canada and Australia. Who wants to be holding USD now!
I have been investing in spec mining stocks for over 25 years, and now I reveal all the pertinent factors you need to consider when buying stocks, particularly gold stocks. The spec market has been sold off of late as risk-weighted liquidity was withdrawn from the market. Get ready because those funds are coming back, and with so few gold producers in the market, you must be thinking - That’s a recipe for excitement in the gold market! You can apply this information to your existing stock portfolio or any new stocks you consider in future. It wont just make you money, it will save you a great deal as well. 
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