With the recent craze of REE investing, one must be careful to invest in the sector with caution. Most companies are speculative, expensive, or both.
The best strategy is to be diversified. a 50/50 split between close to production companies( Molycorp,Avalon Rare metals, Lynas, Rare Earth Elements, etc.) & exploration companies that are still reasonably priced. A junior REE explorer should not have a built in premium in the SP. Some good examples of this are Cache exploration (CAY.V), Pele Mountain (GEM.V) & Critical Elements Corp. (CRE.V).
I am personally invested in cache exploration, critical elements, molycorp, & rare earth elemnts. At the time of purchase they were waited approximately 25% each. I invested 15% of my portfolio. I would not suggest one invests more than 15% of their portfolio in REE. Also, as many of the close to production companies have had large run up's, be careful in investing in the market vectors REE ETf on the NYSE (REMX).