Home Add to Favorite Contact Submit  
             29 March, 2024
 

    
Category:  Articles » Finances » Investing

 

Penny Stocks Offer Big Benefits with Small Investment

Popularity:
         Views: 1992
2011-01-02 05:22:21     
Article by Roney james

We have heard of big companies and fatty stocks offered by them but what are penny stocks? Can they be bought for a few pennies? You are somewhere near to the answer in your questions. Penny stocks are usually offered by new companies and are priced lower than $5.00. Some stocks are priced so cheaply that you can buy them for few pennies. In most of the cases small cap stocks are offered by brokers and so they are less popular in the market. But companies also have the option to hire investor relations firm.

Price is the biggest benefit as well as drawback of small cap stocks. They can be bought for a very small price. Even a small change in their price can help you gain from the transaction. For example if you buy penny stocks worth $50 at $1 per stock then you will be able to buy 50 stocks at a time. Now if the price per stock increases even by $0.10 then also you will benefit by $5. That is a 10% return on investment a good percentage of return for a small amount.

As against this price is also a drawback of penny stocks mainly because it takes longer to see increase in their values as compared to big value stocks which show tremendous changes even in intraday transaction. Their price shows rapid increase or decrease in values. Penny stocks on the other hand take longer to show changes as it is mainly issued by emerging companies which take much longer to materialize funds for further development.

But the price drawback is negligible when compared to the benefits that penny stocks offer. If we review the price advantage from a different angle it can also be said that they are less risky as they reduce the amount of loss suffered. Yes, they are less risky in the highly risky market of stock exchange. Want to know how? This can be explained better with an example where you have bought two different types of stocks.

Let us say you have bought 100 big value stocks at $30 per stock investing a total of $3000 and 100 penny stocks at $0.30 investing a total of $30. Now if the market falls then big value stocks will be more affected and the amount of loss will also be big. Even a $2.00 fall in price of big value stocks will mean you are losing a total of $200 a big amount, especially in this recession time. As against this for penny stocks even if you loss all the money invested (which is of course never going to happen) the loss will look less.

Less risky penny stocks come for a low price, minimize the amount of loss and so give small cap investors chance to increase gains while decreasing losses. The popularity of small cap stocks has been able to lure more and more small cap investors into them. Also when you buy them for a small value there are all possible chances that these penny stocks will make it big someday in future. The return on investment at that time will be incredible.

Specialized in: Penny - Small Cap - Stocks - Investor Relations - Firm
URL: http://www.heritagecorporateservices.com/
Print article      Bookmark this page
Related Articles 
What is the Best Betfair Trading Software? (Popularity: ): When it comes to Betfair trading software there are really only two current leaders in this market. That is Bet Angel and Bettrader evolution. Needless to say, it's very hard to choose between the two.Bet Angel is widely known as the market leader. Offering almost everything you could possibly need for trading on Betfair. Grid, ladder, dutching, charting, bookmaking, automation and Excel integration, Offsetting. Advanced charting is also great to ...
Encash your dreams with merchantmoneyweb.com (Popularity: ): Accepting credit, debit or cash cards is becoming a must for tiny and medium-sized businesses conducting businesses anywhere in the world. Traders are progressively whirling to plastic when they unbolt their wallets.
Shareholder Agreement - Guiding Force Behind Every Organisation (Popularity: ): It would not be a misnomer to state that shareholder agreement is life and soul of any business partnership. Since business partners are also the shareholders of the outfit, it is very essential to have a written document about the rules and regulation that would govern the partnership, a set of agreements which every partner will have to follow. It also determines what stake every partner has in the company ...
The Basics of Compound Interest and Returns (Popularity: ): Compound is the reason why credit card debt is so difficult to climb out of. Compound interest, when used for 'good', can help you save more efficiently and increase your wealth substantially. Compound interest and returns can be complicated. In this article you will find definitions followed by examples to help you better understand the nature of compound interest.Compound interest is interest that is paid not only on the initial ...
Focus On The War - Not The Battle (Popularity: ): Why do most traders lose most of the time?Why is it so many investors will stay with a position as it loses, hoping it will bounce back, instead of cutting their losses? And why do those same investors, when they have a winning position, take quick profits instead of letting the trend play out?It is all about emotions. Not wanting to lose. Wanting to feel good about a profitable position. ...


Related Business 
Stock Guru (Popularity: ): The best penny stock newsletter for staying informed and selecting winning penny stocks. StockGuru is the premiere web portal for company news, informative interviews, investment tips, and trade alerts for penny stocks, Canadian, and mining stocks.
StockWired.com (Popularity: ): Discussion on day trading stocks. From big cap to small penny stocks.
Buying Penny Stocks (Popularity: ): Buying penny stocks – Penny Stocks offer a vast selection of speculative issues for buying and selling low-priced shares. Get the inside knowledge of the prospects and potential of a company before buying.
Value Penny Stocks (Popularity: ): Value Penny Stocks was created by Two Active traders, Steve and Wilson, who have put together this platform in order to provide traders the #1 Penny Stock Newsletter – a resource that actually helps produce real profits for your portfolio. We concentrate on value small and micro-cap stocks that trade on NYSE, NASD, AMEX, OTCBB, and OTC exchanges.
Penny Stock (Popularity: ): Sirius Stocks has succeeded in bringing our members WINNER after WINNER with our top penny stock newsletter. Our staff and penny stocks scanning methods have proven 100% accurate in finding the best penny stocks that move up in our e-mail alerts.
Penny Stocks Investment (Popularity: ): This FREE stock investment tool allows you to view all of your favorite penny stock pickers in one place. Every morning, we receive over 400 emails with the day's hot penny stock picks in our inbox. We then add these to the Penny Stock Rumble's FREE investment tool where you can view performance side by side, along with market data (15 minute delayed).
Small Cap Stock Newsletter (Popularity: ): Subscribe now for latest news on online for small cap, micro cap & penny stocks newsletter and start receiving weekly free updates on small and micro cap stocks poised for big returns.
Stock Guru Canada (Popularity: ): The best penny stock newsletter for staying informed and selecting Canadian and Canadian venture stocks. StockGuru Canada is an excellent source for the latest company news, informative interviews, investment tips, and trade alerts for penny stocks, Canadian, and mining stocks.
Active Penny Stocks (Popularity: ): Penny stocks are considered as more risky because of their volatile nature. Madpennystocks.com keeps a constant watch on the movement of these stocks and keeps you alerted. Its alerts are based on stock volume and stock news. It even offers the comprehensive analysis of stocks in break out pattern.
Penny Stocks Trading (Popularity: ): The common stocks which are traded over OTC Bulletin Board or pink sheets carrying per share value of $5 or under that are known as penny stocks. They bear absolute low value and carry limited liquidity.