First off, just because this is a tip for investing when you are broke, it doesn’t mean that being broke is ever going to be the ideal time for you to make a huge investment in the stock market. At the same time however, the notion that you cannot invest anything when you have a minimal amount of money isn’t true either. The reason for this is relatively simple and it’s because of something called cheap penny stocks.
Penny stocks, as you have already probably gathered from the name, are stocks which trade at less than $1. What that means is that you can actually own stocks of companies even without a huge amount of money and you can gain profit or revenue from those stocks, even if you don’t invest thousands into their stocks like you need to when it comes to other stock companies.
A lot of companies actually start off as penny stocks when they begin trading their stocks on the market. The reason is quite obvious, they don’t need as much immediate capital and at the same time, they obviously haven’t really made a stable name for themselves. The combination of these two factors allows investors like you, to actually make a profit at a much lower cost.
Of course, as with any type of stock, penny stocks do come with a risk. That risk however can be minimized the same way that you would if you were dealing with a large companies stocks. The financial problem faced by large companies is an indication that ultimately, you can’t always accurately predict stocks but at the same time, it doesn’t mean you don’t have some sort of fallback somewhere.
In the case of penny stocks, it still pays to be diligent when it comes to investing your money in the right company. One thing that you should pay particular attention to when investing in penny stocks is to see the current trend in their stocks and shares. The reason for this is generally that penny stocks are faster in terms of movement than regular stocks because of the price that which they are traded. Obviously, more people can by stocks which would cost a few cents each that be able to buy stocks which cost thousands of cents.
Another great advantage to going into penny stocks is that there is a much larger potential of making a huge return. The reason for this is actually quite simple, the stocks can be a bit more risky that regular stocks and as such, you can actually play off some of this risk. Any economist will tell you that the greatest risk will merit the greatest reward and although you shouldn’t be putting all of your money into penny stocks, some good investment in them can definitely boost your revenue exponentially.
At the end of the day penny stocks may or may not last a considerable amount of time but if you are after some good potential short term gain and keep telling yourself the phrase “I need money now” pretty often then this might just be the option for you