Are All Penny Stocks Scams?
When it comes to penny stocks, there’s a lot of misinformation and fear. Financial pundits will tell you that they’re all scams and to stay far, far away. But that doesn’t mean there’s no money to be made on them. With the right research, patience, and discipline, the volatility that penny stocks can provide can result in extreme profits – just ask millionaire traders like Jason Bond and Tim Sykes. These guys flourish in an area where most people are afraid. They’ve made the choice to understand small cap stocks and capitalize on their profit-potential rather than immediately write them off as risky investments.
While only a select few penny stocks actually turn into big-time companies, the majority will eventually fail over time. With that in mind, it’s usually very difficult to pick successful long-term investments. The most success in the penny stock arena comes from knowledgeable day and swing traders who attempt to take advantage of the short-term momentum and volatility that blue-chips typically can’t provide. The bottom line is that certain pieces of news, contracts, and various events mean a lot more to smaller companies as opposed to larger ones. And as a direct result, penny stocks can make huge 50-100%+ moves in just a matter of hours if the catalysts are strong enough – moves that will never happen with large caps. Overall, long-term blue-chip investors tend to expect a 10% yearly return on average, but penny stock traders typically shoot for that type of return on just one single trade. For example: this year alone, small cap swing trader Jason Bond is up well over 400%.