Major stocks with household names, e.
g.
the Top 100, the Fortune 500, and stocks appearing in all the major indices around the world are usually the ones to get the limelight.
Then there are the 'Small Caps' that some investors like to specialise in.
But what are often overlooked are the opportunities to invest in what are known as 'Penny Stocks', small-to-medium companies whose stock price is currently very small.
But it is here where a real opportunity can often be found.
The reason is that 'Penny stocks' only have to increase in price by a small amount to actually double in value.
While not every Penny stock holds out good prospect of profit, the low price of some Penny stocks can reflect a company that is about to take off, if only in a relative small way.
But as a result, their share price could take off in a big way.
Many factors can cause a rapid increase in share value.
It may be that a company has been putting in a lot of research and development (or has finally been granted a patent) and is now on the threshold of marketing a product with real sales potential.
Or the company might be a mining company that has come across a valuable mineral deposit and till now has been held back from developing the necessary infrastructure because of lack of financial backing, and that backing has now become available.
The problem is to identify those companies whose share price is about to take off.
Unless the investor possesses some inside information, it can sometimes be very difficult to identify such companies.
However, by studying the way the share price of a company begins to move, some industry analysts are able to predict fairly reliably which companies represent a good investment.
They may not always be correct, of course, but on balance, if you are prepared to spread your risk among several companies, it can work well for you.
g.
the Top 100, the Fortune 500, and stocks appearing in all the major indices around the world are usually the ones to get the limelight.
Then there are the 'Small Caps' that some investors like to specialise in.
But what are often overlooked are the opportunities to invest in what are known as 'Penny Stocks', small-to-medium companies whose stock price is currently very small.
But it is here where a real opportunity can often be found.
The reason is that 'Penny stocks' only have to increase in price by a small amount to actually double in value.
While not every Penny stock holds out good prospect of profit, the low price of some Penny stocks can reflect a company that is about to take off, if only in a relative small way.
But as a result, their share price could take off in a big way.
Many factors can cause a rapid increase in share value.
It may be that a company has been putting in a lot of research and development (or has finally been granted a patent) and is now on the threshold of marketing a product with real sales potential.
Or the company might be a mining company that has come across a valuable mineral deposit and till now has been held back from developing the necessary infrastructure because of lack of financial backing, and that backing has now become available.
The problem is to identify those companies whose share price is about to take off.
Unless the investor possesses some inside information, it can sometimes be very difficult to identify such companies.
However, by studying the way the share price of a company begins to move, some industry analysts are able to predict fairly reliably which companies represent a good investment.
They may not always be correct, of course, but on balance, if you are prepared to spread your risk among several companies, it can work well for you.