The wise amongst us have huge portfolios of stocks and shares in blue-chip companies that rise and fall with all the whims of the stock market. However we are comfortable knowing that these blue chip companies on average will just keep on rising over the long term. If one or two falter or even fail we know that our balanced portfolio will still show a nice profit.
The ideal is, of course, to have a nice income from dividends coming in by the time we want to retire. It is not much fun though. That portfolio is just there doing it's own thing and we can watch it but not really participate much. Some of us do play around on the side speculating with a little buying and selling of shares just for fun. Some even do this quite seriously and make a good living out of it. Sometimesthey might lose in a day to years income only to pick it up again tomorrow or next week. OK I suppose if you have a good bank to play with.
So what about penny stocks. Where do they fit the equation. They are what they sound like. Stocks and shares of companies that are not worth much which means you can by them for literally pennies. What good are they. Not much good at all except you can buy lots because they are so cheap. That still is not much good because they will usually sit there for ever worth no more than a few pennies.
However, and this is where the fun starts, every now and then one of these low prices companies will do something extraordinary and their share price will take off. And because they are so low to start with they can quickly climb several hundredpercent in just a few days. Nice to have some money on that sort of increase. That is exciting share trading. If a mining company has a good exploration find or similar their stocks will go through the roof. Imagine if you are on something like this. What a fun ride. It is probably worth learning to pick these stocks that are about to take off. It is probably worth learning how to pick an early trend so you can get in early and pick up heaps.
That sounds like a fun way to invest. Keep your blue chips for the retirement fund but if you want some excitement in life have a look at penny stocks. What, you haven't got a huge portfolio of blue chips. Join the club. Penny stocks could be a way to get one. Imagine that ride if you are on it. You bought in at just a few pennies and everyshare that you bought is in the dollars. What a fun week or two it would be. Then you get out, pocket the profits and start searching for that next adrenalin rush. Get into it and enjoy a bit of life.
Catch you soon, Nick
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