Can Penny Stocks Make You Millions?
It feels like a lifetime ago when we were in a huge bull market for several years straight. This question would be a lot easier to answer then but do I believe that penny stocks can make millionaires even today? Yes, it is possible. But it's not going to be a quick and easy ride.
A lot of folks are attracted to penny stocks because they like the sound of huge profits with little money invested. At least thats what people who are trying to persuade you to buy penny stocks usually say. Nothing could be further from the truth. Let's separate the facts from the fiction.
Fiction: Penny stocks are cheap so you can buy a lot of them and make big profits quickly
Fact: Penny stocks usually are priced at less than $5 and have a relatively small market cap. These stocks don't usually have a lot of volume so sometimes the prices of these stocks won't budge at all. At other times, the prices can drop or rise fast. These stocks are very volatile. So, a few big orders can move these in either direction.
Fiction: I will make a killing in a few trades and retire.
Fact: Making profits in penny stock trading is not that easy. Sure you might get lucky and hit it big in a trade or two. If you do, this is likely to breed overconfidence and you won't settle for anything less than a home run from that point. The end result is making a lot of bad trades as a result of greed. I haven't heard of anyone 'retiring' from penny stock trading. Yes, there are folks who make big profits by devoting a smaller percentage of their portfolio to small cap stocks. They do this by continuously learning from their trades and getting good at it over an extended period of time.
Fiction: I just bought stock XYZ after I heard a hot tip. It's a sure winner.
Fact: It's common in investor psychology to gain more confidence in your trade after immediately making the trade. The same thing happens when you place a bet at the racetrack. We're hardwired that way. Don't fight it. It's better to stick to the facts. When you hear about 'hot tips' get answers to the following questions about the stock: Is the source of the tip reliable? Have you invested in this sector successfully before? Does the stock chart fit a technical pattern that you are familiar with? Are the fundamentals of the company solid?
We think small cap or penny stocks are an important part of your portfolio especially if you are looking for growth in the longer term. There are some strategies you need to be aware of otherwise you will learn everything the hard way.
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So you've made a decision to get going into small cap stocks and give it a whirl. The opportunity of investing only a couple bucks together with the opportunity of 1000% gains is certainly attractive. Were you aware True Religion Apparel, Inc. (TRGL) was once a penny stock? It now trades in excess of $30/share. The terms "penny stocks" and "micro cap stocks" may be used interchangeably. Technically, micro cap stocks tend to be classified and based on their market capitalization or ...
So you've decided to jump into penny stocks and give it a whirl. The opportunity of investing just a few bucks with the potential of 1000% gains is certainly attractive. Did you know True Religion Apparel, Inc. (TRGL) was once a penny stock? It now trades at over $30/share.
Most penny stocks are shares of small companies that usually don't have great market penetration.The main difference between stocks and larger stocks is that they fluctuate enormously on a daily basis. When you decide to invest in the right small or large cap company, make sure you limit your order. While the OTCBB does require companies to file timely documents with the SEC, the pink sheets have no such requirement. Minimum standards act as a safety cushion for some investors and as a...
Penny stocks are cheap stocks which can result in a huge return and high profits. If investors analyze day traders trading and keep an eye on top penny stocks, they can gain a lot of helpful tips and can make good interpretations. It is important for every investor to know exactly where to buy their stocks from and such information is mostly needed by beginners, as beginners can find the stock market to be a tricky place.
Penny stocks are an easy and swift way to earn more profits if the investment is done sensibly. I have compiled some top penny stocks for 2010 which are expected to make investors big return on their investment.
Investors find penny stock investing to be quite attractive as it only involves cheap entry into the market and results in huge gains. In order to find the best penny stock trend research is very important. For a successful venture, research is an essential part.
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