Secret Report: The Best Penny Stocks You Can Buy Right Now
The best penny stocks you can buy right now are none of them. You shouldn’t buy penny stocks. A penny stock is to investing what slot machines are to gambling… a money machine slanted in favor of the system, and not the player.
This article is going to be short, because it has an extremely simple message: penny stocks are super cheap for a reason. They’re cheap because they’re risky, there’s rarely too much real information about the companies, and they’re essentially gambling. They’re almost always a bad decision.
It’s really tragic, because I get an email almost every day from some poor guy who hasn’t saved much for retirement, but is honestly convinced he’s going to get rich and retire early in a few months by putting his money into a handful of small companies that no one trusts, and are probably going to collapse pretty soon. In other words, someone who really needs what little money they have usually loses it all when they play the penny stocks game.
The reason penny stocks are a horrible idea should be obvious to a cautious investor, but just the same, we’ll take a quick look at a few concepts that should shed some light on the overhyped investments:
- No penny-stock funds. Penny stock mutual funds are essentially non-existent. Most companies that tried to launch a mutual fund went bankrupt and were liquidated. There’s a reason: penny stocks are shares of companies that are cheap for a reason, and almost all of them collapse pretty quickly. The ones that explode into value are absurdly rare.
- Stock pick salesmen. Never trust someone who wants to sell you stock picks for a relatively small sum of money. I’ll never sell stock picks in my life, and for a good reason: if I really know what I’m talking about, I’ll buy the stocks myself and won’t say a word to anyone else. This will make it easier for me to make my move. Other investors know this. So if someone’s selling you stock picks, they probably have no idea what they’re talking about, or they’re selling obvious company picks like “buy Wal-Mart stocks.”
- Penny stocks are cheap. They’re cheap for a reason, and it’s probably one of the following reasons. They’re cheap because there’s little info on them. They’re cheap because they’re probably about to go bankrupt. They’re cheap because there’s no way to predict their future success at all. They’re cheap because they’re in a cut-throat industry like medical research or resource exploration. They’re cheap because no one wants to buy them because they are usually horrible investments.
In the end, it should be obvious: you shouldn’t buy penny stocks. If you want to gamble, play poker. If you want to invest, invest cautiously.
To look into a rational approach to investing, check out my article on the permanent portfolio — you’ll be able to create a simple portfolio that won’t require more than one day a year to manage.
It’s simple, it’s on the safer side, and it works. Click here.
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