Thursday, August 22, 2013

A Penny Stock Newsletter Can Revitalize Your Portfolio

By Tara Daniels


The stock market is an ever-popular investment avenue with many. While most investors stick to blue chip stocks, although these are usually safe they do not always offer the best prospects for capital appreciation. A good penny stock newsletter will be able to point a serious investor towards potentially much more rewarding opportunities.

The prices of these more affordable stocks can increase sharply if there is an improvement in business climate or other important factors. Percentage-wise, moves on these stocks can be substantial, which makes it worth your while to consider them. Trading volumes are fairly low, so you need to get in early to take advantage of upturns, and this shortage fuels any move.

Because of the shortage of buyers, it is particularly important not to wait for a downturn before taking your profits. By not being greedy and selling into a rising market it is easy to find enough eager buyers. Greed is even more dangerous than usual in this niche, as these shares are abnormally sensitive to negative perceptions and can quickly turn sour.

It can be difficult to do all the necessary research and keep up with news which affects all the qualifying stocks, especially for people living in other countries. This is why it is useful to get help from specialists who have the time to do research on the companies concerned and are more knowledgeable about the market conditions and the chances that individual companies will succeed.

With the prices of such stocks being so affordable, it is quite easy to purchase relatively large numbers of these stocks. A relatively small rise in cents or dollars can therefore translate into a much larger percentage price rise. This means that the same amount of money invested could increase substantially more than is possible with more expensive shares.

It is best to invest only a portion of your total portfolio in such riskier holdings. On the other hand, they can add an extra zest to a portfolio in terms of its overall prospects for substantial growth. You should only risk as much as you can comfortably afford to lose, which should determine the level of risk you will accept. It is also best to spread your investment over a few of these stocks, to reduce risk and increase the chance of a meaningful gain.

Some of these stocks are also great for a buy and hold strategy. This depends on the fundamentals of the company and its particular market niche. A lot of market leaders were once very cheap to buy, and those who bought and were willing to ride the swings have been extremely well rewarded.

Most investors hope to achieve above average growth in their stock portfolios, and this is hard to do when relying on blue chip shares. A penny stock newsletter may provide leads on some interesting alternative investment avenues. It is best to research the available newsletters and subscribe to the one with the best track record of picking great winners consistently.




About the Author:



No comments:

Post a Comment