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The Solution Is Buying Penny Stocks


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Buying Penny Stocks

Is Buying Penny Stocks a Good Idea?

Some investors ignore the opportunities in penny stocks because they are put off by the low price tags. This is not surprising. After all, some of the stocks classified in this way have values that are actually below one cent per share. However, their extremely low values just mean that they have more upside. The key to understanding the value of penny stocks is in mathematics.

When you purchase stock from some mega-corporation, their shares might be worth $300 per share or even more. No matter how wealthy you are, you have a limited amount of money that you can invest. If you have $30,000 that you are willing to invest on something new, you will only be able to purchase 100 shares of this stock with the hefty price tag. In order to give you any sort of return, that stock would have to make very unusual gains. Even an increase of $50 per share would only result in a potential profit of $5,000.

Now take that same amount of money and invest it in shares worth just three cents apiece. You could buy one million shares. It would only take a one-cent gain in stock value to generate a return of $10,000. You could derive profits of over 30%, even after fees and commissions.

Start Buying Penny Stocks Today

There is no time to waste. Inflation has already eaten a hole in any profits that you have made in the last few years. If you start buying penny shares soon, you can go slow and invest modestly at first. This will allow you to learn the ropes before the wheels of this economy really come off the bus. These investments may be the key to surviving whatever troubles the financial future holds.

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