Business Development

Those of you new to investing may be asking, just what are penny stocks and are investing in stocks a good fit for you? To answer this question we must first determine your risk appetite.

Generally, investing in stocks and shares should be proceeded with caution. Many a tale has been told about how people invested heavily in stocks and shares only to end up burnt badly. However, much can be said for the incredible benefits an educated investor can gain by doing proper research before investing.

Those new to investing may want to stick with blue-chip stocks at first, and gradually move on to other types as you get more comfortable. Blue-chip stocks are a good bet if you have a low appetite for risk, but the gains are generally low.

Those of you who have more to spare and can afford a higher risk should consider picking a few penny stocks. These stocks usually can be bought for around $0.10 a share. The low price means you can get a few varieties of these penny stocks, thus diversifying your investment while reducing risk as you put your money into a few companies stock instead of just one. As the market curve makes an upward shift in roughly every seven years, parking your extra cash into these stocks may prove to be a good bet. Do bear in mind though, that the risk of losing a large part or all of your investment is very real if you are unable to withstand the test of time as these stocks can be fiercely volatile in nature and may literally blow up in your face due to their combustible nature.

If, however, you are rigidly certain that you will not be needing that amount of cash in the next ten years or so, these penny stocks are worth putting your money into. If you have the luxury of time on your side, you could expect to see returns of more than double what you had put in in a matter of months, or even hours! As long as the company does not declare itself bankrupt, and you do not let go of your shares when the market is low, the only loss you would sustain is a paper loss, therefore, hold onto them till it’s a good time to sell!

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