Thinking about investing in penny stocks? If so, you should ask yourself if you like to live on the wild side, or can tolerate a considerable amount of risk in your life, at least in your stock portfolio. Don’t get us wrong, penny stocks represent a great way to earn huge returns but where there is reward there is risk. That’s just how it is when it comes to investing.
There are many hot options to choose from when it comes to penny stocks. You can find young start-up tech companies, pharmaceutical companies, struggling big names like Radio Shack, and many others. Penny stocks are generally considered stocks that sell for less than $5 dollars a share, and for companies with low market caps.
You can even find marijuana stocks and hemp stocks! Given that marijuana is being quickly legalized in the United States and elsewhere, investing in marijuana or hemp might net you some big returns down the road. At the same time, however, governments could reverse course and crack down on marijuana and hemp companies. Like we said high-risk, high-reward.
At various points in time Apple, Microsoft, and numerous other companies could have been considered penny stocks. Consider this, only about ten years ago Apple shares were selling for less than $10 bucks a pop, now they are selling for more than $600 dollars (taking stock splits into account).
Just think, if you had invested in Apple (or Microsoft or one of the many other companies that were once penny stocks) you would have netted massive returns. This means that penny stocks can often be the best stocks to buy, at least if you know what you’re doing. Of course, figuring out which penny stocks to buy can be very difficult.
Figuring Out Which Penny Stocks To Buy
Okay, we can’t tell you which penny stocks you should buy because markets change far too quickly, especially when it comes to high-risk assets. Penny stocks are highly volatile, that’s why there’s so much potential to make (or lose) money. We can help you figure out which penny stocks to watch, however.
If you’re looking to invest in some stocks with serious growth potential, you should look for cutting-edge markets. Think of it this way, thirty years ago the personal computer market was cutting edge. There were few major PC makers and few operating systems. This meant both Apple and Microsoft were operating in cutting edge markets. Now, the personal computer market is highly mature.
So what are some new cutting edge markets you can tap into for massive grow? One market worth considering is the fast-emerging marijuana market. Sounds crazy right? A few years ago investing in marijuana would have meant breaking the law, but now it’s a fast evolving industry. We should mention, however, that marijuana isn’t exactly legal either, it’s in a sort of gray zone.
Another fast emerging market is for mobile phone apps, mobile software, and other mobile programs. While the market has been established for several years, it is still a fast-evolving and quickly growing market. This means that many new companies are still entering the market and these companies present great opportunities to invest.
Closing Note: Risks Are High, But So Too Are Potential Rewards
Remember, while the risks are high, an investment in a penny stock now could potentially net huge returns in the future. We certainly won’t tell you to bet your house on a penny stock, but if you have some risk capital you should consider an investment.
We certainly believe that you should at least consider adding some of these high-risk, high-reward stocks to your portfolio. Yes, there are risks when it comes to investing in penny stocks, but there is also a great chance for cashing in on some serious rewards.
So if you’re looking to make your millions you should consider investing in emerging companies in cutting-edge industries, or other similar stocks with tons of upside!