Penny Stocks | Low Priced Stocks – Why Penny Stocks Are The Way To Go
Trading the stock market can be a very daunting experience, especially if you are not some rich big shot. I can tell you from my own experience that trading stocks was an extremely intimidating experience for me. Then I discovered the real beauty of low priced stocks, otherwise known as penny stocks.
What many new traders don’t realize until they start trading is that the “system” is manipulated so that the rich can get richer, while everybody else has to scrounge for the leftovers. If you don’t believe me, just take a look at most of the stocks that trade in the NASDAQ or the Dow.
Let’s say that you wanted to buy 100 shares of Wal-Mart (arguably the biggest company in the world).
At the current moment, Wal-Mart is currently listed at about $53 a share. What this means is that if you wanted to buy 100 shares of Wal-Mart, it would cost you $5300. Don’t you think that’s a lot for just 100 shares of one stock????
If you’ve got a $100,000 portfolio, maybe it’s not that big of a deal. But let’s be honest, that’s probably not the case for the average Joe who wants to make some money in the market. They don’t have that kind of money.
Also, how much can you realistically expect to make from that? If you are lucky, maybe a 10% return for the year, You are not going to retire off of that, anytime soon.
Also, how diversified are you when you just own 100 shares of Wal-Mart? That’s a rhetorical question. obviously, you are not diversified at all.
Now compare this to low priced stocks, such as penny stocks. With $5300, you can have a massive portfolio of stocks, where you are diversified among different stocks, and different industries, so you have a truly diversified portfolio.
Also, think about the profit potential? With penny stocks, the potential is truly limitless. 10% return for the year on a low priced stock would be considered a pretty low return. These kind of stocks can go up as much as 300% in one day, so you can image what the kind of return you can get for the end of the year.
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