Should you invest in penny stocks


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Should you invest in penny stocks

  1. 1. Should You Invest In Penny Stocks ?
  2. 2. No doubt penny stocks are suitable to the high-risk taking investors. Even though, a few more conservative investors may find some attraction in the low risk promise of the hefty payouts that the right penny stock can offer. In fact, many investors dream of being the one to find that perfect penny stock with huge potential that might someday become the next LDDS turned WorldCom before the fall. The truth is that everyday little businesses become big businesses. Unfortunately, the numbers of small businesses that make to the big leagues are very few when compared to those who do not.
  3. 3. Penny stocks are a great way for small companies to finance growth spurts, smooth over rough spots and manage to become even better. This will also gives companies a chance to restructure, and by allowing their stocks to be traded as penny stocks, they are generating revenue that can be reinvested into the company to great effect. This is sometimes a successful venture for the company but there are many times this isn't. This is always part of the risk to be taken when investing in penny stocks. When the companies manage to pull themselves together, grow at an unexceptional rate, and become the company you hope for, the payouts will be amazing. But do not expect immediate results from your penny stock investment.
  4. 4. You should also be aware that many companies use penny stocks in order to run scams on unsuspecting investors. You may not possible to get every details of the penny stock companies because unlike those big companies that trade with the big boys (NYCE, NASDAQ, etc.), these penny stock companies are not required to open their books to potential investors and do not face nearly the same amount of scrutiny that larger corportations face when opening their doors to investors.
  5. 5. Whether to trade or not to trade penny stocks is the question that depend entirely on your personal sense of adventure and the risks of your money you are willing to take. There are always many firmly believe that in order to win big, you much also willing to risk big. This is a way of life for many that holds true for them in love, in life, and in money. These people are much more capricious with their money and are will to take the risk without reservation or fear of a negative outcome. These are people who do wonderfully, win or lose when invesing in penny stocks.
  6. 6. On the other end of the spectrum, there are those who jealously guard their nest eggs and bank their retirement security upon the funds going in that basket. These are people that are quite likely to find themselves panicking their way through penny stock investment for many reasons. You can't really research the companies and you can't quickly and easily access to your funds once invested. This removes some sense of control over your financial health and is not a comfortable feeling for investors who like to feel in control. I can definitely relate to those who are in no condition, really, to invest in penny stocks. It will be a frightening investment practice when houses, retirements, braces, and college educations are on the line.
  7. 7. So it still boils down to you and the person you are deep down inside. Are penny stocks right for you? Only you can make that decision.
  8. 8. If you are the type to invest in penny stocks without carrying the heavy baggage of worry, stress, and nervous sweats along, you may find yourself in the position to change your wealth status. Even if you go against your comfort level and make the investment there is much to gain. Unfortunately the risks of this sort of investment are so great that should not be overlooked or underestimated.
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