Why Are Investors Attracted To Penny Stocks?
- 1. For a penny stock investor, the cost isn't all that matters when it comes to choosing what company you wish to invest with. Although the initial investment is low, the investor must also believe in the company's potential for future earnings.
- 2. The company's performance in the marketplace is a valuable piece of information when one is trying to assess a company. Prediction of the market investors' reaction in regard to this particular company will tell the story about this company's potential to bring in profits.
- 3. Expectations are often based on financial forecasts and growth of a company. A slow and steady growth in value indicates a company as being a potentially good investment.
- 4. Slow, gradual growth of a penny stock's value usually means it has the potential to triple or quadruple its value quickly and easily. If, instead, the value goes up very fast when the market first opens, it is not good practice to jump on the stock until you can see if the value remains steady.
- 5. Very often penny stocks rise very rapidly only to fall back, sometimes to a lower value than they had in the beginning. Waiting out for the fall allows you the opportunity to invest into this penny stock without fear of losing from false demand.
- 6. Some investors who turn their noses up at penny stock investing will consider dabbling in it if they find a company that shows amazing promise and happens to offer penny stocks as their only trading capacity.
- 7. Penny stocks allow you to gain decent earnings using minimum capital, and for that reason they are very popular with new investors.
- 8. Even if a little unpredictable, penny stocks offer the chance to earn considerable amounts and to boost the investor's self-esteem in preparation for future investments.
- 9. It's a little more feasible than playing the lottery, and millions of people spend a portion of every paycheck on lottery tickets. With penny stocks, chance isn't the only thing determining if someone will win, since some calculations are possible to steer the investor toward the best choice.