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Tis the Season!

Seasonality is a real thing in the investment arena. Some annual market moves actually relate to the seasons, like natural gas prices rising in the heat of summer and freeze of winter as air conditioner and heater demand ramps up.

Other seasonal moves have nothing to do with the weather – but are just as reliable.

The one I want to point out: outsize gains over the next three months.

The chart below shows the Toronto Venture Index from mid-December to mid-March each year since the winter of 2001-2002.

Almost every line boasts a positive slope. Even more significant: most of these three-month gains represent a significant out-performance of the index over the rest of the year.

Of the 13 years covered:

  • The period between mid-December and mid-March has outperformed the rest of the year 12 times.
  • The Venture Index has only lost ground twice in those 13 years, compared to six January-to-December losses
  • Twice the Venture Index achieved multiples of its annual gain in the December-to-March period.
  • Four times the Venture Index gained December-to-March before going on to end the year down.
  • Three times the period from December to March provided an outsized share of the year's gain.
  • One other year the period offered downside protection, losing only 6% of the year's overall loss.

Predicting how commodities, explorers and miners, the overall markets, and global economies will perform during 2015 is impossible. A multitude of intertwined forces are at play and it will take time to untangle them.

That doesn't mean profits are off the table! If history repeats itself – as it so often does – the beat-down resource sector will show some life between now and March.

And there is more than seasonality supporting the idea that we are looking at a three-month window of opportunity.

With the current bear market a few months shy of four years, it has officially claimed the title of longest small-cap mining correction in 30 years. Canaccord Genuity tabulated the numbers:

The rebounds that followed previous bear markets each included several periods of outsize returns – usually starting with the first few months.

The 1984-1997 bull run, the 2008-2011 bull market and the mother of all 1999-2007 bull market each started out with a bang, gaining sharply in their first three months. Only the 1991-1996 bull market was a bit slow to establish, and it still notched up a gain over its first three months.

Seasonality + Potential for an early rebound surge = A few good months ahead

Whether the surge will be sustainable I do not know. But that doesn't matter if your goal is to lock in some quick gains to start the year.

The plan: buy resource stocks now with the commitment to sell…

  • Once a stock gains 30%. Conservative investors should sell all their shares at this point. Those willing to stomach more risk should sell enough to take their initial investment off the table, holding onto their remaining 'free' shares for additional risk-free upside.
  • All or the rest of your holding before Mar. 15th – even if things still seem fine. The seasonal tide can turn very quickly.

This isn't a concept I can claim as my own. Many successful investors play the December-to-March game every year – especially when the overall picture is unclear. The additional buying pressure from seasonal investors actually helps the market rise.

Of course, if it becomes clear before the middle of March that this is indeed the start of a real bull market the plan could change. I think that unlikely. I still believe gold bottomed on Nov. 5th, but just because we've hit bottom doesn't mean the ride back up is imminent.

I suspect a sideways summer is more likely, a calm that in hindsight will appear as the final chance to buy miners and explorers before the next commodity upswing.

For all those investors anxious for some positive numbers before then: play the season. For advice on the best stocks to play with, subscribe to Resource Maven: Turning Point.

Tis the season!

To learn how to turn resource knowledge into investment success: subscribe to Resource Maven: The Turning Point.

EDITORIAL POLICY AND COPYRIGHT: Companies are selected based solely on merit; fees are not paid. This document is protected by copyright laws and may not be reproduced in any form for other than personal use without prior written consent from the publisher.

DISCLAIMER: The information in this publication is not intended to be, nor shall constitute, an offer to sell or solicit any offer to buy any security. The information presented on this website is subject to change without notice, and neither Resource Maven (Maven) nor its affiliates assume any responsibility to update this information. Maven is not registered as a securities broker-dealer or an investment adviser in any jurisdiction. Additionally, it is not intended to be a complete description of the securities, markets, or developments referred to in the material. Maven cannot and does not assess, verify or guarantee the adequacy, accuracy or completeness of any information, the suitability or profitability of any particular investment, or the potential value of any investment or informational source. Additionally, Maven in no way warrants the solvency, financial condition, or investment advisability of any of the securities mentioned. Furthermore, Maven accepts no liability whatsoever for any direct or consequential loss arising from any use of our product, website, or other content. The reader bears responsibility for his/her own investment research and decisions and should seek the advice of a qualified investment advisor and investigate and fully understand any and all risks before investing. Information and statistical data contained in this website were obtained or derived from sources believed to be reliable. However, Maven does not represent that any such information, opinion or statistical data is accurate or complete and should not be relied upon as such. This publication may provide addresses of, or contain hyperlinks to, Internet websites. Maven has not reviewed the Internet website of any third party and takes no responsibility for the contents thereof. Each such address or hyperlink is provided solely for the convenience and information of this website's users, and the content of linked third-party websites is not in any way incorporated into this website. Those who choose to access such third-party websites or follow such hyperlinks do so at their own risk. The publisher, owner, writer or their affiliates may own securities of or may have participated in the financings of some or all of the companies mentioned in this publication.


In her letter, Resource Maven explains what she is buying and selling, and why. Maven has bought into several of the markets best - performing stocks well ahead of the curve. She regularly identifies exciting new exploration opportunities and manages the inherent risk by selling some into speculative gains. And the mine builder and operator stocks that form the basis of the portfolio give strong, ongoing leverage to the rising prices of gold and silver. She has your precious metal bases covered.

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