Why should investors invest in penny stocks?

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Teacher
Posts: 4
Joined: Mon May 11, 2020 5:04 pm

Why should investors invest in penny stocks?

Post by Teacher »

One question which frequently arises is why investors should choose penny stocks and what is the risk-reward ratio.

I am an experienced investors in penny stocks of the past several years and have had a lot of success and also many losses.

While there are many different types of investing, micro cap investing is the most rewarding one.

Micro cap investing has the potential to yield huge gains in a short period of time.

It is very common for penny stocks to move upwards of 25% in any given day.

But, yes, they can also plunge to the same extent, leading to losses.

The nature of penny stocks makes them both very rewarding and very dangerous.

Generally speaking, there is a co-relation between risk and reward.

The more the risk, the more reward can be gained.

One example is that of placing money in a blue-chip AAA fixed deposit.

The risk is virtually zero but so is the reward.

Similarly, investing in diversified mutual funds and blue-chip companies offers a compromise between risk and potential.

Investors who are eager to double or triple their investment in a short period, while willing to take the risks, should look at penny stocks.

Penny stocks are small companies with small operations but large aspirations.

If we can find the small number of these companies which may become bigger companies, there can be a dramatic growth in their stock prices of upwards of 10,000% in a year.

Sunil Lalwani
Posts: 8
Joined: Mon May 11, 2020 5:29 pm

Re: Why should investors invest in penny stocks?

Post by Sunil Lalwani »

Please recommend good penny stock for investment purpose.

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