3 Hottest Trades in 3 Hot Sectors

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Hot Stock #3: Agnico-Eagle Mines Ltd.

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Toronto-based Agnico-Eagle Mines Ltd. (AEM) is a component of the Amex Gold Bugs Index (HUI). Not all Canadian gold stocks follow the loonie (the Canadian dollar), because some, like AEM, have mines in Mexico, the United States, Finland and all over the world. The company is extremely diversified, so the risk associated with the Canadian dollar being so strong, especially against the U.S. dollar, and the fear of profits being less due to forex exchange rates, is far lower with AEM than with many other gold stocks.

I think AEM could be a play not just for earnings, which are set to be reported Oct. 28, but for the parabolic rally we have been seeing in the gold sector. AEM just happens to be the best of breed, and it is in a pattern much like HUI. I like stocks that track an index closely, because it reduces the chance of getting thrown a curve ball.

I have an old saying: "Trade the easy stuff and drink the hard stuff." And that is why I like AEM. Bottom line: When going with best of breed, we also get the best of profits.