Billionaire Resource Investor: ‘Be On Guard For This Possibility In Gold And Silver Investments’

Sprott is one of the most well known names in global resource investing, managing some $10 billion in assets. In the following interview with Future Money Trends, the CEO of Sprott U.S. Holdings, Inc., billionaire Rick Rule, explains that while the next bull market in precious metals is now underway, it will not be a one way trip with prices skyrocketing to the moon.

Investors should be on guard and understand what to expect as the resource sector picks up steam over the next five years:

(Watch At Youtube)

It’s important to note two things.

One, markets don’t go up interminably. The truth is that a bull market is always punctuated by backing and filling. That’s normal, natural and it’s healthy. This is the kind of market that could easily fall in the interim by 20% or 30%. It’s part of inhaling and exhaling, and is in fact healthy.

Two, it is important for listeners and readers to be on guard for this potential slow-down. It’s important because peoples’ anticipation of the future is set by their experience in their immediate past. And peoples’ experience in the immediate past with regards to resource stocks is catastrophic.

It might be that speculators would view a 25% or 30% retrenchment, which is in fact normal and natural, as being a failure of the resource market, which I don’t believe is true.

Remember that these [gold and silver] stocks… this index…  fell by 50%… and then it fell by another 50%… and then for good measure it fell by another 50%…

This is a market that from top to bottom measured by the index fell 88% in nominal terms and more than 90% in real terms… Remember, they have a long, long way to go over the next four to five years.

In short, Rule is saying that a bull market has most certainly started in the precious metals space, but it won’t come without ups and downs over the next five years.

You will see pullbacks.

You will see mainstream pundits panick and tell you the run is over.

But all of this, according to Rule, is perfectly normal and healthy, and it allows new investors an opportunity to move into the space.

The long-term up trend for gold and silver is intact, especially considering that many of the companies who mine it have seen their market capitalizations reduced by upwards of 85% in recent years.

This interview has been contributed by Future Money Trends. Check out their latest investment ideas for the resource sector, including a mining company that provides a resource so essential that the world would literally starve without it.