Jan

31

Penny stock vs. blue – chip trading: which is more profitable?

Posted In: Investing Tips

Have you ever wondered why everyone is abandoning blue-chip stocks and embracing penny stocks?

The reason is very simple…it is profitable to invest in penny stocks than in blue chips and these are the reasons.

1. Large numbers of shares: because of the prices of penny stocks, one can purchase a large number of shares. Just imagine you have $200 and the penny stock you are investing into is $0.10. If you should buy $200 worth, you will be getting whopping 2000 shares. While if you buy a blue-chip stocks valued at $50 per share, which gives you 4 shares. The large numbers you are able to purchase gives you huge returns.

2. Low capital: because of the low price of penny stocks, you can start with as little as $200 and grow it into thousands of dollars with a few weeks.

Picking the right penny stocks

Penny stock can be profitable and also it can be one of the easiest ways to lose money. The secret of making huge gains is to pick the right stocks.

Briefly, here are three secrets which can help you in picking the right penny stocks all the time…

• The small cap company which you want to invest in should be a company that is addressing the needs of the masses whether product and service.
• Look for a small cap company that is making news by expanding, growing and coming out with new products.
• Subscribe to a good penny stocks alerts service. There are both free and paid alert services.

If you implement the three secrets above, you will never go wrong.

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Article Source: Penny stock vs. blue – chip trading: which is more profitable?