Posted on 05 August 2012.
Investors are drawn to hot penny stocks to buy because they know that they can make incredible profits in a small amount of time. The earning power of these stocks is inversely proportional to their size. That is one of the open secrets of these investments.
As an example, consider a penny stock worth just 10 cents per share. Most investors would see that as a stock resulting from a failure and pass on it. Shrewd penny stock investors know that this extremely low price is really an advantage. It allows the stock to generate huge earnings from even the smallest upward trend in value. If that same stock spikes upward just five cents, that creates a profit of 50% for the shareholder. A modest investment of just $10,000 would return $5,000. That could happen in just minutes with the right hot penny stocks to buy.
You have to search carefully to find these hot penny stocks to buy. There are an endless number of these stocks and it would be impossible to review all of them. The best option is to restrict your search to the most active sectors of the market. Right now, that would require you to look at stocks originating in the energy sector, the precious metals sector and the medical technology sector.
Penny stocks in these areas of the market are volatile because money is moving in and out of these investments. This sort of volatility is perfect for a smart penny stock trader. If you can get into a stock when it reaches its nadir, then you can earn incredible profits as it bounces back. Timing is the most important skill required when finding hot penny stocks to buy.
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