Penny Stock Investing: Roller Coaster Ride or Smooth Sailing?


Most investors can’t handle the up and down price swings in penny stocks. It can be a roller coaster ride that is not for those with weak hearts. All investments carry some degree of risk and penny stocks are considered to be even more risky. That couldn’t be further from the truth as not all penny stocks are riskier investments as compared to a restaurant, house, blue-chip stock or a thoroughbred race horse. The main reason penny stocks are so popular is because they have such huge growth potential.

It’s not hard to see that it’s easier to triple the sales of a company that generates $5 million in sales as compared to a company generating $200 million in sales. Since most Wall Street analysts are not covering penny stocks, these potential profit gems are usually undervalued. Undervalued stocks rarely see their stock price get too high or get knocked down too low.

Investors have a major advantage when they can purchase penny stocks before the bigger investors do. Typically penny stocks lack any attention until they reach $1 per share. At that point, a large investor base starts to research them which will attract more buyers of the stock into the market. This means that the early investor has an opportunity to get in at a low price and profit before the Wall Street giants come in.

Over time, the advantage of investing in good penny stocks can translate into a significant increase for your personal wealth. Your investment portfolio may not look as glamorous as one full of name brand companies, but it will outperform them, especially in a bear market. Smart investors always jump at the chance to take full advantage of undervalued penny stocks. History has proven that penny stocks have outperformed the overall stock market each and every year. Investors have the advantage with the accessibility of the Internet which allows important trading information to be delivered right to their email inbox.

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***Reminder: never chase stocks that gap at the open and always protect your profits!

Good luck in making the Best Penny Stock picks.

2012 – Become a Millionaire!!

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