Investing in penny stocks

The very first thing everyone should understand completely is that investing in penny stocks has the potential to make large amounts of money, or you could stand to lose 100% of your investment. Personally I have had 2 separate stocks that headed south and in the same period I also had 9 that have either paid very nice ROI or in some cases I still hold a position since there is more upside to come in my opinion. Also I might add this is only an example from a relatively short time frame of less than a year. Some of these returns vary from 105% in one day which is huge. I normally do not do a lot of day trading but on occasion if everything seems right I will. Typically it is one of the riskiest strategies there is, although if you know enough of the facts it can pay large. Several of these investments were short term and have shown between 100% and 250%. I have one that has paid an unrealized gain of just over 425% and yet another that has also paid an unrealized gain of just over 820%. Just for clarification the unrealized gains would indicate I presently hold my position in these companies.

I should point out that when I refer to "penny stocks" I am referring to any stock under $5.00 per share. Generally speaking most of the penny stocks I like are under the $2.00 with several being in the $0.20 to $0.50 range. Obviously if one can pick the winners while they are at these extremely low entry prices the amount of gains one can realize is bridled only by how much you invest. Notice that word "if", unfortunately this truly is the largest word in the English language.

There are a multitude of people picking stocks everyday and there are even more methods of how they come to pick a stock than there are people picking them. Some it would seem just merely guess at it and hope they hit it right once in awhile. Some have highly complicated software while still others play follow the leader with someone they deem to have infinite wisdom. Most will charge outlandish prices per year just to get their newsletter. I know this because I have fallen prey to several of them myself.. 
For those who would like to view some of the trades I have completed or picks that are open yet I will give you a partial list of some. I bought SNVP for $0.1440 and sold for $0.2910. This was one of my rare day-trades. I bought WLC back when the price was $0.71 and sold when it was $1.52. I bought FIS when it was $0.23 and sold at $1.39. I purchased CUU at $0.98 and also AVL at $2.37 and again at $2.52, all of these I currently hold at present along with others. As of today's date the closing price on CUU is $1.89 while AVL closed at $8.95. As you can see these are not just run of the mill picks but have actually shown great to awesome returns to date and unrealized gains for the ones I currently hold.

The next post I would like to look at what it takes to have a profitable portfolio in my opinion. Some people have told me that as soon as they buy a stock it starts going down and they just cannot seem to recognize any gains. While there is no way anyone can guarantee profits there are many things that can help to either make money and also many ways to help preserve money when a stock goes against you. Until next time Happy Trading!