Penny Stocks

A penny stock in general trades for under five dollars a share, and as the name implies, sometimes for pennies. Most of the time they’re young companies, or start-ups in speculative markets like mining or technology.

Buying Canadian penny stocks can lead to a big payday when you make the right choice. But the odds against success are high. Penny stocks are almost always involved in riskier ventures, such as finding mineral deposits that can be mined at a profit, commercializing unproven technologies or launching new software.

What’s more, it’s hard for any new company to grow into a profitable business, and it’s even harder in pioneering fields. But it’s relatively easy to launch a stock promotion that purports to have answers to social problems or ways to profit from emerging technologies.

That’s why penny stock promotions are always more common than legitimate start-ups. Penny stock promoters love to make deals—however indirect—with major, household name companies. They find it far, far easier to sell stock to the public if Goldcorp, BHP Billiton or some other major mining company has agreed to look at possibly financing exploration of their mining claims, or if Apple or Intel or some other household-name multinational has agreed to make them a “channel partner” and perhaps someday sell their revolutionary software or “cloud” application. The link with a major gives them instant credibility, especially with investors who are willing to buy penny stocks.

In fact, when a penny stock shoots up on the news of big-company involvement, and the property/program/revolutionary software is still in the early stages of development, it’s often a good time to sell.

There’s room for penny stocks in your portfolio, but at TSI Network we recommend our three-part Successful Investor strategy for the bulk of your portfolio:

1- Invest mainly in well-established, mostly dividend-paying companies;
2- Spread your money out across most if not all of the five main economic sectors (Manufacturing & Industry; Resources & Commodities; Consumer; Finance; and Utilities);
3- Downplay or avoid stocks in the broker/media limelight.

Don’t buy a single penny stock until you read this FREE Special Report,
TSX Penny Stocks: Hot Canadian Penny Stocks and How to Invest in Penny Stocks in Canada.

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Penny Stocks Post Archives

Trading Penny Stocks comes with lots of ways to lose money

If you think you can make big money trading penny stocks, think again. These shares rarely have significant investment value.

Penny stocks are often traded “over the counter” or on the “pink sheets” (a holdover term from when over-the-counter stock quotes were printed on pink paper),… Read More

Even The Best New Penny Stocks Can expose you to these risks

Even The Best New Penny Stocks Can expose you to these risks

Investors looking for the best new penny stocks have to realize that many pennies are nothing more than stock promotions or well-executed marketing campaigns
It’s hard for any new company to grow into a profitable business, and it’s even harder in pioneering fields. But it’s relatively… Read More

Penny Stock Mining Companies can be a Costly portfolio Mistake

Penny Stock Mining Companies can be a Costly portfolio Mistake

The best penny stock mining companies to invest in are not overly promotional, have strong management, and are reasonably well funded
Penny mining stocks are some of the riskiest stocks Successful Investors—or any investors for that matter—can buy. These companies typically aim to find mineral deposits… Read More

HealthSpace Data Systems has interesting software but big problems

HealthSpace Data Systems has interesting software but big problems

A Member of Pat McKeough’s Inner Circle recently asked for his advice on a company that develops software to help health-industry regulators and others better manage their information and improve their efficiency. Its clients include more than 300 state and local government organizations across North… Read More

Diamond Estates looks to China for growth

Diamond Estates looks to China for growth

Pat McKeough recently responded to a Member of his Inner Circle who requested his advice about a growing Niagara winery.  

Diamond Estates Wines & Spirits has expanded from its Ontario base with the acquisition of a winery in British Columbia. Plus, the company is pursuing… Read More

The Best Canadian Penny Stocks Have these 7 Elements in Common

The Best Canadian Penny Stocks Have these 7 Elements in Common

If you are looking to invest in the best Canadian penny stocks, focus on stock quality—and make sure it has experienced management, as well as these 6 other elements
Penny stocks are often unproven companies, which makes them highly speculative in nature. Stock prices of penny… Read More