to these faster price moves.
❯❯ Steeper learning curve. Newer investors have the most to learn. The combination of greater volatility in penny stocks, rapid price moves, bigger magnitudes of those moves, and the potential to own several different stocks at once, enables inexperienced traders to get up to speed very quickly.
For newer or less-experienced investors to quickly learn about trading, or to develop their own styles to afford them the greatest opportunity to profit, penny stocks may be the perfect outlet.
Penny stocks appeal to smaller portfolios
Individuals with less money to invest may only be able to afford a few shares in a larger company. They also may not be too impressed by 5 or 10 percent gains, especially if that adds up to only $50 over the course of an entire year.
Given their situation, many investors with minimal portfolio values opt to not invest at all. Others gravitate to penny stocks.
Investors who believe in the power of penny stocks, yet who do not have a significant portfolio, understand that low-priced speculative shares may be the best way to increase their financial standing. Of course, not all traders who buy and sell penny stocks have a small portfolio, but a significant portion of traders with small portfolios do trade penny stocks.
Penny stocks appeal to millions of investors and potential investors. Low-priced shares have probably caught your attention as well, as evidenced by the fact that you are reading this book.
Take a moment to consider if trading penny stocks is actually appropriate for you.
Penny stock investing may be most appropriate for individuals who
❯❯ Are willing to do the work required. Investing in speculative shares requires effort on your part. Proper analysis, performing due diligence, and monitoring the shares you purchase, all require work. Investors who put in the time garner the greatest rewards.
❯❯ Possess a high tolerance for risk. You will enjoy penny stock investing more if you can tolerate risk and volatility well. If you are going to lose sleep over 20 percent price swings, safer investments may be more appropriate for you.
❯❯ Intend to invest “play” or risk money. It would be a mistake to invest in speculative stocks with money intended for your child’s education or to buy groceries. Penny stocks are best traded with funds you have set aside to have some fun. Never trade with cash you’ll need for the important things in life.
❯❯ Are skeptical of what they read. The penny stock industry is filled with hidden motivations and misleading reviews of the companies. Don’t believe most of what you read, and always perform your own due diligence.
❯❯ Have realistic expectations. You might make some good money trading penny stocks. However, if you’re expecting to become a millionaire from a $300 investment, you will be disappointed.
❯❯ Have time available for research and trading. Unlike day trading or options trading, you won’t need to be glued to multiple computer screens all day long. However, the more time you can set aside to research your shares and monitor them, the greater the level of success you will probably enjoy in penny stocks.
If you decide that penny stock investing makes sense for you, I encourage you to keep reading. In the rest of this book I go over every concept I know for investing well in low-priced shares.
Конец ознакомительного фрагмента.
Текст предоставлен ООО «ЛитРес».
Прочитайте эту книгу целиком, купив полную легальную версию на ЛитРес.
Безопасно оплатить книгу можно банковской картой Visa, MasterCard, Maestro, со счета мобильного телефона, с платежного терминала, в салоне МТС или Связной, через PayPal, WebMoney, Яндекс.Деньги, QIWI Кошелек, бонусными картами или другим удобным Вам способом.
