Trading in so-called “penny stocks” has of late dramatically increased its following in a public seeking productive investments. There was a time when traders would ignore these securities as they bought heavily in large-caps and mid-caps whether for a short- or long-term trading.
Recent changes in the small cap stock market have made these low-cost items much easier to acquire and trade. No longer is it necessary to have large amounts of capital to be able to create a generous income in the market; this having always been due to the fact that shares of mid-sized and larger companies typically are rather expensive.
Much more reasonable in price, because of the size of the companies who issue them, penny stocks are truly accessible to people of more modest means. Now are you going to become a Donald Trump or Warren Buffet trading in cheap stocks? Considering that the percentage of traders becoming fabulously rich is rather tiny, the answer is an obvious “probably not”.
Most of us are aware of the probabilities, but these inexpensive stocks offer an advantage you don’t get in most market investments: leverage. And it is the sort of leverage that enables the middle class folks of the world to join in the fun of playing the market.
Who knows, you may be one of those who start out trading in these bargain stocks and, through their own ingenuity, end up in much bigger things. Yes, there are lots of folks who turn their noses up at penny stocks, regarding them as disposable.
But one should remember that a fair number of very large and successful concerns issued penny stocks in their company infancy. What if you had bought a couple of hundred shares of Microsoft when it was a quarter a pop?
Not only would you be sitting in piles of cash by now but it would be quite a feather in your cap to be able to claim such a canny purchase. If you have the money to spare, and the guts to try the not quite mainstream in terms of investing, penny stocks is most definitely the way to go.