THINKING SMALL GIVES YOU AN ADVANTAGE WITH MICRO PENNY STOCKS

If you have never heard of investing in micro penny stocks, you are missing out on one of the profitable means of capital planning.  Their name refers to the relative value of an individual price of the share of a company, usually when

it is less than one dollar.  This does not mean that a company is bankrupt, of course, merely that they do not have the massive buying power of Google or Microsoft.  Investors scour through ranks of unknown micro penny stocks in order to find companies that they believe will soon gain exponential value.  “Micro” refers to tends to mean the same thing as penny stock, but refers to the market capitalization (the total cost of all shares) rather than the cost of individual shares.

PLAYING MICRO PENNY STOCKS IS THE SAME AS PLAYING PERCENTAGES

Why are speculative investors so interested in finding hot young companies with bottom-barrel stock prices?  The exponential value of increase over time gives some penny stocks the greatest amount of profit per unit than any other.  Imagine you own a thousand thirty-dollar shares in Google; if it increases to thirty-five dollars, you have made an extra five grand, but not even increased your investments by twenty percent.  Now think of what happens if you have a thousand shares of a fifty-cent stock that increases to three dollars; even if you have “only” made twenty-five hundred dollars, you have seen your investment grow six-fold.

These stocks, however, can be quite risky to hedge your investments in.  Corporate information for small, start-up ventures may not be as readily available compared to that of Fortune 500 companies.  These companies have little history, making their strategies and long-term goals relatively unknown.  Investing in micro penny stocks can pay off, but also poses a greater threat of failure.

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