Why Trade Cheap Stocks

Why Trade Cheap Stocks

 

If you’ve got a cash-stuffed trading account to play with, you can have your pick of stocks trading for $30 a share and more.
But what if you’re just starting out in the market? Or what if your investment purse isn’t as well-stuffed as Warren Buffet’s? In cases like these, it’s pretty much impossible for an ordinary investor to hold any kind of decent position, much less make serious profits on owning a stock.

This is why so many investors choose to allocate a percentage of their portfolio to cheap stocks. Cheap stocks are the easiest way to get into the market for $5 or less a share. And even though you won’t find any cheap stocks on the big board exchanges, you’ll find plenty of choices on the OTC Bulletin Board.

Because cheap stocks are priced so reasonably, you don’t have to make a huge initial investment. Instead, find a stock you like, buy as much as you want, or can afford to buy, and let it roll.

This is great both for beginners and for more experienced investors looking for big profits. Beginners can start small and limit their risk while they get more comfortable with trading. Meanwhile, more experienced investors can take as large a position as they are comfortable with.

Sometimes a company that begins by trading as a cheap stock develops into a blue chip-level stock and returns amazing profits to investors who decide to hold on to it. Other cheap stocks can skyrocket in a matter of weeks or even days, as their share prices accelerate on major news or other events. In the case of fast-moving cheap stocks, investors who capture an early position can easily be looking at gains of 300% or more virtually overnight!

Of course, investors must understand that stocks that have the potential to move so explosively in one direction have the potential to move equally quickly in the other direction. This is why a smart investor never assigns more portfolio than he or she can afford to lose.

Still, there are great benefits to trading cheap stocks – and great profits to be made. So it’s worth taking a good, long look at a few choice cheap stocks and investigating their potential.

That’s why our Cheap Stock Alert research team scours all sources for reliable information for the companies we recommend. We believe that if we don’t take the time to do it right, we should not do it at all. This approach has paid off handsomely this year for our subscribers, and we’re constantly looking for new picks to better our record.

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