| Is penny stock trading for losers? Penny stocks are | | | | volume plays. Traders will get involved with micro cap |
| highly speculative investments and anyone who has | | | | stocks for different reasons. Novice investors are |
| lost money will cry foul. Though this investment | | | | attracted to the low investment required and see it |
| vehicle is not for everyone, penny stocks can add | | | | as an opportunity to learn the basics of buying and |
| fuel for high growth to a diversified portfolio. | | | | selling shares. Sophisticated investors may use them |
| There is an element of risk in all investments. The | | | | for hedging purposes. Intermediate investors may |
| collapse of "companies too large to fail" in the fall of | | | | just want to increase their portfolio's risk/reward |
| 2008 reminds us that even "blue chip" stocks are not | | | | exposure. Whatever the reason, any of these |
| guaranteed securities. While it is true that penny | | | | investors could be aptly labeled "losers" only if they |
| shares are one of the riskiest investing alternatives, | | | | did not perform due diligence before laying down the |
| they also offer potential exponential returns. It is not | | | | cash. |
| uncommon to see returns in the hundreds or | | | | Whether investing in penny shares is suitable for you |
| thousands percentages. Understand that you cannot | | | | will depend on various factors such as your risk |
| pick stock winners all the time but as long as your | | | | tolerance, returns expectations, investment |
| gains exceed your losses, your money will grow. | | | | experience level, and financial and investment position. |
| The most basic definition of a penny stock, also | | | | It is unfair to broadly claim that penny stock trading |
| referred to as a "micro cap" stock, is a stock that | | | | is for losers. From the perspective of the savvy |
| trades below $5 per share. These shares are highly | | | | trader making a lot of money, it's actually for winners! |
| volatile and making money trading requires high | | | | |