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Stocks- Penny Stock Investments a Chance at the Big Payoff

Updated on May 4, 2015

Pump and Dump

Pushing a stock up in the mind of the public when there is truly no worth is a pattern with a few stocks. Once buyers are worked into frenzy, the people touting, “what a buy” take their profits and run. It id recommended by some of the best at stock buying to seek out value in a stock before jumping in and be careful not to listen to the people rallying for “BUY,BUY,BUY.” They may simply want their money back, leaving you holding an empty bag.

Penny Stocks

A gulf separates penny stocks from blue chip stocks, sitting on different ends of the scale, with a lack of financial capital on one end that goes to extremes to an abundance of funding on the other. Any of these stocks might send your account to great fortune. One could hold the magic number and all can do well in the stock portfolio of any investor; it all comes down to expectations and the chance you are willing to take. You must understand what kind of future you want your stock portfolio to create for you, then spend time researching your choices.

Penny stocks are the newest stocks on the market, saying they are very unstable is an understatement, but if you are courageous the return can be staggering, unfortunately this could go in either direction. A bit like panning for gold you could win big or go broke. These sometimes diamonds waiting to be dusted off will be picked up or funded by more seasoned investors and become quite profitable. The opportunity to make a windfall of cash in an amazingly short period of time has kept interest in penny stocks going for years.

On the other end of the spectrum are the Blue chips, these are the money boys, with a financial record for progress that goes back to the early gold rush; with billions of dollars for backing. They are on the top of asset investments and are usually the best place to put your money if you want to play it safe. The measurement for a Blue chip is a stock priced at ten dollars and up. Many of the best known companies are Blue chip stocks, so finding one to invest in does not take a Wall Street expert.

Which of these stocks you choose to invest in depends upon certain variables, age, financial position, status in life, and love of adventure. Some need and prefer investment without the backlash of major risk this is a circumstance where Blue chips fare well. Buyers wanting penny stocks but wish to avoid the risk use penny stock index accounts. Blue chips are long term accumulative, picking up money in a steady more accountable fashion.

Both Blue chip and Penny stocks can benefit an investor. With careful planning in a portfolio the outcome can be productive. Younger people may wish to take a chance on the more volatile penny stocks where a mid aged group may try a bit of both. People closer to retirement may wish to stand fast with the tried and true Blue Chips, holding a steady financial level on their finances. Stocks in the right environment make a lucrative place to increase wealth but much study is required to invest wisely.

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    • SpiffyD profile image

      SpiffyD 

      7 years ago from The Caribbean

      Good insight into the relative merits and demerits of Penny stocks Tiffany.

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