Buying penny stocks is seen as the cheap and nasty way of investing.
Penny stocks are not seen in the same light as their glamorous cousins, the blue chips.
Fortunately, though, for the cash-strapped investor there are some good reasons to invest on the cheap with pennies.
In this article we will talk about the top reasons to invest on the cheap.
1.
Profits come fast There is no waiting around with penny stocks.
They either rise fast or fall fast.
If you have done some good research, or have good source of stock picks, the majority of what you purchase should rise.
The beauty of buying penny stocks is that you don't need to wait long to evaluate a stock.
In most cases you can be in and out in a few days, showing a healthy profit.
2.
You get your answer now As discussed above, penny stocks don't take long to trend one way or the other.
Investing in expensive stocks, like blue chips, means waiting around for something to happen.
There is less risk with blue chip investment, but nowhere near the fast profit margins.
3.
Small movements mean big dollars When a movement of only 1 cent occurs with penny shares there is potential to make a lot of money.
An investment of $500 or $1,000 can double overnight with a small movement in price.
A small movement in price of expensive stocks means almost nothing, unless you own thousands of shares.
Buying penny stocks can mean fast profits.
In turn these fast profits can be re-invested for further fast track profits.
The potential is there to make a fortune quickly trading such low priced stocks.