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A Penny for Your Stocks: 6 Reasons to Invest in the Top Penny Stocks Today

By AK, 24 May

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Although cheap and typically regarded as being traded by amateurs, penny stocks can yield quite the ROI. However, they also come with a great amount of risk.

Most brokerage firms won't trade in penny stock at all. Or, if they do there is an added fee.

So why do people trade in penny stocks if they're so bad? Obviously, there is the potential for high reward, but there are various other reasons for investing in the top penny stocks today. Keep reading to find out if you should invest in penny stocks or not.

1Returns

It was said above and it should be said again. It is after all one of the top reasons for investing. The return. The reward. Watching that price climb and climb ever higher.

The risk is always going to be high, however, having a game plan, knowing what you are doing, or hiring an advisor or broker will help to reduce and minimize those risks. Investing in the right companies with the right game plan will help to ensure success.

Returns

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2Cost

Penny stocks, as the name suggests are stocks that are sold for less than a dollar. Today a stock that trades below five dollars is considered a penny stock.

Because of how cheap they are, they are very attractive to inexperienced investors who are looking for cheap stocks. However, because of their low price,

the potential for high reward is great.

Investors are attracted to the possibility of seeing a 100% return or more on their investment.

Cost

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3Raising Capital

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There is a small benefit to companies looking to raise capital because of how cheap the stock is and the potential for such a high return. And not just any high return, but a better chance of seeing a 100% returns than with a stock trading at over $10 a share.

This can be great for businesses who are trying to raise capital fast and don't have a large amount of capital, to begin with. There is a chance they could turn their initial capital investment into double what it started at in very little time.

Raising Capital

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4Small Portfolio

Due to the price, penny stocks appeal to those investors who wish to have a smaller portfolio. Typically an investor with a small portfolio of penny stocks doesn't have a lot of capital to invest to begin with.

However, they do wish to invest in something and so penny stocks are an attractive option. They don't require a high initial investment and again offer the chance of a high reward. This is also why they appeal to new investors as well.

Small Portfolio

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5Steep Learning Curve

Trading in penny stocks might be like comparing it to a race. Once the market opens, penny stocks are off. That is why they also appeal to the impatient.

Because of this break neck speed with which prices could drop or rise, there is a very steep learning curve for new investors which, oddly enough, makes them attractive to new investors. The theory there is what better way to learn than to dive in the deep end and figure it out.

Steep Learning Curve

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6Greater Diversity

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Because penny stocks are so cheap, they offer the ability to have a rather diverse portfolio where other stocks trade at much higher prices making it difficult to purchase large amounts of shares on a budget.

But with penny stocks, an investor can really diversify their portfolio by buying shares of stock from several different companies. Usually, investors just starting out only purchase a few shares at a time. This can lead to taking quite a bit of time before an investor starts seeing any real rewards.

Greater Diversity

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It's Raining Pennies....Stocks

While there is quite a bit of risk involved with investing in penny stocks, there is also a great amount of reward. It is easy to see the appeal for new and veteran investors alike.

There are many reasons for someone to invest in the top penny stocks today (high reward, greater diversity, steep learning curve, etc...) how deciding to make the jump is up to the individual.

Conducting your research and knowing what you're getting into will help you to steer clear of the scammers and take advantage of the wide wide world of penny stocks!

Visit here, for complete details you want about penny stocks today!

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