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

Are High-Yield Penny Stocks Worth Investing In?

Are High-Yield Penny Stocks Worth Investing In?

Penny stocks are rarely the high-yield investments that some aggressive investors think they can be. Instead of putting too much money into penny stocks, investors will benefit the most by seeking shares of high-quality companies with a history of paying a consistent dividend
Penny stocks… Read More

Canadian penny stock soars as copper rises

Canadian penny stock soars as copper rises

Rising copper prices are paying off for this Canadian junior minor, owner of the world’s largest copper operation.

The company has stepped up its output to meet demand from growing global economies as well as electric cars and charging stations. And the stock’s share price has… Read More

Penny Stocks: Losses mount for The Score

Penny Stocks: Losses mount for The Score

The online sports media company suffered a loss in the latest fiscal year, despite nearly doubling its revenue.

THE SCORE INC. (symbol SCR on the TSX Venture Exchange; www.thescore.com) delivers customizable sports news to fans through their mobile phones and computer desktops. It generates revenue through… Read More