A few years ago you may have thought that putting your money into one of the largest mining companies in the world would be a relatively safe investment. However as any Rio Tinto investor will tell you, the last year or so has been an incredible rollercoaster ride where fortunes have been made and lost.

Less than a year ago, on May 16 to be precise, the share price was trading at a record high of £71.67. This was mainly due to speculation that the company would be taken out by BHP Billiton. As it turned out though this takeover was ultimately rejected and this news, along with the global recession causing commodity prices to fall sharply, sent the share price of Rio Tinto tumbling to the ground.

It fell to a low of just £9.95 last December, which is an incredible fall of over 86% from it’s highs. These falls will have destroyed many investors but conversely it will also have resulted in substantial gains for investors who bought close to these lows.

For instance the share price of Rio Tinto has today ventured above the £30 mark so therefore anyone who had bought these shares at around £10 will have enjoyed gains of 200% in just 5 months.

So I guess the lesson to be learnt from this post is that timing is everything, even when investing in huge market-leading companies such as Rio Tinto.

 

 

Filed under: UK Stocks

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