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Do Penny Stocks Make Money As Claimed

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Do penny stocks make money? Learn all about it.

do penny stocks make money

With stories of people making millions by trading penny stocks doing the rounds on the Internet, many people are wondering – do penny stocks make money? If you are

pondering about the same question, the answer to it is both yes and no. Penny stocks are similar to larger stocks, except for the fact that their market capitalization is much lower and they are riskier investment as they are easy to manipulate.

The volatility associated with these stocks and the uncertainty about their returns has earned them the nickname of the slot machines of the equity market. Thus, the answer to the question of do penny stocks make money depends on the expertise of the investor in picking the right stocks and trading them wisely. For instance, it is highly recommended that you avoid picking penny stocks of companies that have an annual turnover of less than $10 million.

In addition to that, do not buy into the hype generated through e-mails and other media channels as the company itself often doctors this. Furthermore, you can prevent burning your hands while trading in penny stocks by sticking to the industry vertical that you have in-depth knowledge about and only picking those stocks that are traded on one of the major stock exchanges in the United States.

How do penny stocks make money?

A sound investment strategy is the key for making money with penny stocks. For this, you need to be able to pick a startup company that shows considerable promise. Do your research about the company and pick the stocks of a company whose product is patented and has a high consumer demand. To sum up, instead of asking do penny stocks make money, you should get out there in the market and get ready to make a profit after you have done your homework thoroughly.

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