Hot Penny Stocks
Penny stocks have become a popular form of trading stocks on the market. These types of stocks involve stocks that are valued at less than $1.00. Other penny stocks can range anywhere from one cent to $5.00. Investors will find out that there are many benefits from trading penny stocks but there are a few facts to be aware of before investing in penny stocks. Investments that display higher amounts of risks will always show higher possibilities for growth. This is the same for penny stocks. Even hot penny stocks still show some level of risks that investors should weigh before investing. The growth potential with penny stocks is enormous. One example of this is a $.25 penny stock growing to $25 in a short amount of time.
Hot penny stocks can be found with newly developed companies that have yet to be found. Growth potential in any stock with any company is huge when investing in the beginning of the stock. In the past, penny stocks were looked at as too risky or even thought of as scams. When penny stocks first started, there was very little information and many people were uninformed about the growth potential of penny stocks. There are some new penny stocks that can tank in the markets, so there are some risks involved. Today, investors can pinpoint new companies and analyze their chance of growth.
New investors are drawn to penny stocks for a number of reasons. First off, you don’t need a lot of upfront cash when making an investment. Unlike other traditional stocks, penny stocks allow new investors to start out small. Small investors have a much higher chance of turning their little investment into a huge money making machine. With traditional stocks, more money is needed up front and the growth of normal stocks is nowhere near the amount of growth the hot penny stocks offer. Growth potential with penny stocks is the number one appealing factor for both new investors and experienced investors.
Anyone can take a small investment and turn it into a fortune with penny stocks but the down side to penny stocks may be something that some investors don’t want to deal with. Since penny stocks are related to new companies the amount of transparency with the company is minimal. Traditional stocks that involve companies that have been around for years have more transparency than penny stocks do. One other downside to penny stocks is the fact that they are more volatile than tradition stocks. Newly developed companies that haven’t been around for awhile have a higher chance of failing than companies that have been around for years.
Big companies like Ford, GM and others all started out as a penny stock. Imagine how much money could have been made if you invested in these companies when they first came on the scene. This fact alone is what makes hot penny stocks appealing. Even though there is a higher amount of risks involved, investing in penny stocks is relatively inexpensive when compared to traditional stocks. Not all companies start out as penny stocks. Some companies start out the offers around $20 a share. There is a lot more money to be lost with new companies that start out their shares at $20 when compared to penny stocks.
Hot penny stocks have made a lot of millionaires over the years and will continue to do so. The trick behind making a killing off of hot penny stocks is figuring out what companies will most likely take off. This task is easily done by experienced investors but for new investors it will be more difficult to do.