Penny Stocks and Experiements!

22/01/2012 01:06

Speculative investments rather than running for several blue chip and fortune 500 companies are generally known as penny stock investing. Unlike bigger firms these are those which are generally not seen on stock market boards and are either new or unknown to investors. Penny stocks are also known as micro caps or juniors. Prices are highly volatile and so are gains and losses in assets are natural.



Due to this market being so volatile investors get attracted towards it. Those who are adventurous and risk taking majorly shift their focus from bigger market to this investing zone that allows reaping higher returns with associated risks.


Players know how to play well thus they jump to this highly volatile market and make best efforts to achieve higher returns in minimum time period.

Of course, there is more risk than buying bonds, blue chips or defensive stocks - but this added risk is tempered with the possibility of making the big gains. Most penny stocks, but not all, are resource or technology companies who initially sold shares in an effort to raise money for exploration or product development programs. Many of the companies have large debt loads and are not necessarily making more money than they are losing. However, it is the potential of a major or even minor success in their quest that often incites dramatic price climbs, and this is where their value lies.


Risk with big gains is the biggest quality that those adventurers get attracted towards penny stocks.


Though on having a proper research you will get to know that there are only two to three superior stock companies that you should invest in but once you are able to identify such big fishes then your investment opportunities will double and your returns will be doubled too. So it is advisable to conduct proper research and investigation before making final investments, no matter how adventurous you are!