Mar 27, 2012

Posted by in Penny Stock | 0 Comments

Choosing Risky Stocks To Invest In

How Risky Stocks to Invest In Can Benefit Your Portfolio

You should always remember to include risky stocks to invest in when you compose your stock portfolio. There is an age-old piece of wisdom which says that your total holdings should contain a mixture of safe investments and riskier investments. The purpose behind this adage is to get listeners to put some money into investments that can possibly make fantastic returns.

Contrary to the beliefs of novices and people who are unfamiliar with investment, expensive stocks are often not very lucrative. They are safe. If you want to make serious profits on your investments, then you have to find some risky stocks to invest in.

Risky stocks to invest in are either worth less than their potential or more than their stated value. The risk is what creates the possible earnings. A safe stock is a known factor. Everyone knows that the company leadership is intelligent and the business plan is sound. In these cases, the stock value is only going to go up incrementally.

Risky stocks are dangerous because no one is really sure of their value. Their price stays low until there is a consensus about their value. When this consensus comes about, the price shoots up and those investors who had faith in the company previously reap the profits of that increase in stock value.

Examples of Risky Stocks to Invest In

Examples of risky stocks to invest in are all around you. One place to find many of them is in the over-the-counter markets. Penny stocks are often traded here because they do not meet requirements created by the Securities and Exchange Commission for trading on the major exchanges.

Penny stocks are extremely risky because so little is known about them. The stocks traded on the exchanges all publish important fundamental data about their operations. Investors can study this information to determine if they want to trust these stocks with their money.

Investing in penny stocks is often like gambling. You do not know a lot about the company but the price is low and you can buy a lot of the stocks all at once. Even a slight increase in the value of these risky stocks to invest in can create a windfall for you.

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