Penny stocks are stocks sold at $5 or less and are not listed on the national listings. It costs very little for a mini profit and no heavy money is needed for such an investment. The blue chips cost hundreds, so people like these little stocks to work with. Some like the fact that penny stocks don’t need a lot of regulation (which can lead to abuse still) and less hassle from people like the Securities Exchange Commission.
There are lots of things about penny stocks that are not true and misguided. One example is the belief that we need to swing for the fences and go for big profits or don’t go big at all. Not rtei. That aim of roughly 15%-30% profits in investments is unrealistic because nobody strikes that rich unless it is a groundbreaking tool like Facebook and Google. Returns and growth are not that instant. It accumulates after a period of time. With penny stocks, a major profit won’t be in 15 years, but closer to 40 years. Here are five other lies about penny stocks.
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Have A Lot of Money
Where the blue chips cost hundreds or thousands to buy, the penny stocks require an account of, basically, $25. That’s virtually it. No need for the big accounts to spend hundreds of dollars for hundreds of stocks.
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Be A Professional Trader
Novice traders start out with the penny stocks, which mean zero knowledge is needed for this. There are easy guides on how to trade and using penny stocks is a good start to practice with. Think of it as playing slot machines. The curb will quickly be found to ace this.
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Have A Portfolio That Is Split Into Sections
That is probably true for the blue chips. Not so much for penny stocks. It is so small, they are almost worthless (and literally in pennies) if it is diversified. Keep it one small pile.
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You Will Never Become A Millionaire With These Stocks
While it was mentioned that high profits per year are highly unlikely, it does not mean being a millionaire isn’t in the realm of possibility. There are specific strategies in which penny stocks can lead to reaching seven figures. It will take some time and a bit of luck, but explicit rules in the trade and knowing where to go with the money exactly will lead to a long-time jackpot within a decade. It’s not instant like the blue chips, but it still can work out.
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Good Traders Are Undefeated
That fantasy of being never wrong on an investment is exactly that: a fantasy. To be the best, one has to lose money and learn from their mistakes. Don’t get emotionally invested and play it smart, not with your heart. But, if you lose, just learn and move on.
Penny stocks are simple and easy for anybody to trade with for a nice profit. It is like a game of poker: bet $20, win $40. We’re not dealing mutual funds where it is fancy. Don’t be intimidated.
Note: If you want to know the stocks mutual funds are currently buying, you may check this site: Mffais.com.