Take Your Time – Invest Wisely In Penny Stocks; But Do Invest

Penny stocks have traditionally been viewed as a way to gain generous returns on your investment.

The penny stock market moves very quickly and can be hard to navigate unless you are a seasoned trader who can read charts and trends and know what to look for in order to make a profitable investment. Penny stocks are volatile. They will quickly move up, and move down just as quickly. Remember, if you buy a stock at $0.10 and sell it at $0.12, that represents a 20% return on your investment. A 2 cent decline leaves you with a 20% loss. Many stocks trade in this range on a daily basis. If your investment capital is $10 000, a 20% loss is a $2000 loss. Do this 5 times and you’re out of money. Keep your stops close. If you get stopped out, move on to the next opportunity. The market is telling you something, and whether you want to admit it or not, its usually best to listen. All of that said; perhaps the key would be to slow it down, look around, find companies that you know — and get involved in those. Not the flippant movements of a stock chart. That works for day traders, not for mere mortals, like us.

Penny stocks, as the name suggests, are shares that are available at extremely cheap rates. Being available literally for pennies, you can purchase such stocks for as low as $2 per share. These stocks are usually of very small companies like Strategic Global Investments, Inc. (STBV), which have a market capitalization of less than $500 million. They are not traded at the major stock exchanges like NASDAQ or NYSE, but are listed in the pink sheets or the OTCBB (Over The Counter Bulletin Board), because these stocks are of companies chose not to fill out extra long form requirements. They are also referred to by other names such as pink sheet stocks, nano stocks, small caps, micro caps or juniors.

What a misnomer regarding penny stocks, “Penny stocks are not the kind of investments that a person should consider if he or she wants shares that slowly grow over several years.” You find major corporations listed in the penny stock market. Not because they are destined for failure, but because of the current financial regulatory climate.

Many investors that have found out how to trade penny stocks have also discovered that the smart way to invest is to do it using various avenues. In other words, do not put everything on one type of investment. Other types of shares that are sold include common, preferred, and treasury shares. Common shares become treasury shares if the corporation buys them back from the investor. Preferred shares provide the most advantages towards ownership. Some of these include advanced voting rights and dividends. A person who is a preferred shareholder gets paid first when a company has to file bankruptcy.

Thanks for stopping by, we believe that this article can help you in your decision making process. Remember to do your research!

GAAP, Inc. is a shareholder of  Strategic Global Investment, Inc.  owner of WaZuu Website, for your information.

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