Investing in penny stocks can be risky. However, the bigger the risk the higher the reward, as they say. The goal is to buy penny stocks at the lowest price possible as to make a profit and sell as it goes up in value. Penny stocks are usually priced at $5 or less. So if you purchase a lot of said stock at a low price, it could go up in value. As a result, if you sell it you could potentially make money.
The Difference Between Penny Stocks and Blue Chip Stocks
Penny stocks are different than blue-chip stocks like Apple or Google. If you think about penny stocks most are considered over the counter opposed to larger stocks trading on exchanges like Nasdaq or the New York Stock Exchange. It is crucial to research the companies you want to invest in because many could be hiding their financial information. If you can figure out the companies that are on the come up and have high earnings you could receive a high reward.
But here is the beauty of penny stocks. Despite the risks, if you can stomach the volatility, you may have a shot at this wild west style market. Many penny stocks to watch will see monstrous breakouts; sometimes within the matter of a few hours. This having been said, let’s take a look at the following list of penny stocks to watch that are trading under $3 right now: