Spot the bubble - mining shares or property stocks?

Both mining stocks and property shares have risen dramatically in the past year. So are investors pouring money in because these assets are worth buying, or simply because everyone else is? One good indication that a peak has been reached is when insiders start to sell out. And that’s exactly what’s happening in one of these sectors right now...

Spotting investment bubbles has become a tough call in recent years. When interest rates are low and money is cheap, investors become careless about where they put it. It becomes harder to decipher which assets are rising in price because they're worth buying, and which ones are rising just because everything else is. But two sectors stand out in particular mining stocks, and shares in property companies.

Take mining shares. The prices of precious and base metals - notably gold and copper - have rocketed this year, and so have the shares of the companies that produce them. The recent correction has seen them give back some of those gains. But even now, mining stocks are still up more than 60% in the past 12 months.

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John Stepek

John Stepek is a senior reporter at Bloomberg News and a former editor of MoneyWeek magazine. He graduated from Strathclyde University with a degree in psychology in 1996 and has always been fascinated by the gap between the way the market works in theory and the way it works in practice, and by how our deep-rooted instincts work against our best interests as investors.

He started out in journalism by writing articles about the specific business challenges facing family firms. In 2003, he took a job on the finance desk of Teletext, where he spent two years covering the markets and breaking financial news.

His work has been published in Families in Business, Shares magazine, Spear's Magazine, The Sunday Times, and The Spectator among others. He has also appeared as an expert commentator on BBC Radio 4's Today programme, BBC Radio Scotland, Newsnight, Daily Politics and Bloomberg. His first book, on contrarian investing, The Sceptical Investor, was released in March 2019. You can follow John on Twitter at @john_stepek.