Using Research When Investing In Penny Stock Stocks | Articles Effect

To communicate about risky stocks to invest in is actually an issue of relative degree of hazard. In today's finance environment, almost all stocks are carrying a bigger part of risk than usual. What makes risky stocks stand out from their more prosaic companions is not that they carry greater risk, but that they offer the possibility of a larger reward.

Even the most solid corporations are liable to external hazards such as a potential for chaos in the EU Buck area, or the chance that a serious slowdown could destabilize China. The difference is that there's no upside risk excess attached to their stock price. Risky stocks are more accordingly priced and they offer larger rewards in the event the risk fails to appear. Finding risky stocks to invest in is the individual's answer to investors. Devoting a small bit of an individual portfolio toward more speculative firms allows financiers to magnify their profits if they choose wisely, yet lose a relatively small portion of their total stake if they do not.

Some Risky Stocks To Invest In

It may come as quite a shock to many people, but Lehman Brothers (LEHMQ), the company that may forever be associated with the downfall of 2008 is still in business, but just barely. Given its current stock price of $0.03 a share, a one year high of $0.11, and a few multi-billion dollar suits yet to be fixed, Lehman Bros could still see a little bit of a pop before being utterly wound down. This is the last word in risky plays, since the financier is riding a classic dead pussy-cat in anticipation of the likelihood of the last bounce in the corpse. Yet such an event is certainly possible and could yield large, swift profits if the stock is closely monitored.

Arena Pharmaceuticals (ARNA) is a textbook high-risk versus high reward stock to lure bold investors. The stock is definitely captive to FDA approval of its signature weight loss drug, Lorcaserin. If the approval comes through, the stock is likely to fly high. If it doesn't, Arena is likely to be fed to the lions. The stock represents a nearly perfect illustration of the whole reason behind putting a tiny part of a portfolio towards these sort of companies. Selecting the proper risky stocks to invest in is the way to catapult profits far ahead of more shy investment options.

Henry Flood is a penny stock financier who writes a daily blog about stock tips.

Source: http://www.articleseffect.com/using-research-when-investing-in-penny-stock-stocks.html

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