Investing in Penny Stock

Investing in Penny Stock

Another option that you can choose to work with is penny stocks. These stocks often have a much smaller share price than traditional stocks, so they are called penny stocks. These are listed on specific exchanges and can be risky as these are smaller companies with less money. These stocks are also very volatile, and move up and down quite a lot, due to their smaller nature.

size

how big is the company:

  • Small-cap
  • Mid-cap
  • Large-cap

style

  • Growth: the stock has a growing pattern
  • Income: stocks that pay a high dividend
  •  Value: domestic-based or international based stocks

sector

related to which industry- health, insurance, etc.

 

cap calculation

Cap calculation is essential as if you invest in a large-cap, you are at high risk. That’s why your portfolio should have diversification, a mixture of different kinds of stocks.

Income stocks

As opposed to growth stocks, income stocks pay dividends in actual money. People invest in them to use them anywhere or buy other stocks.

Stocks acc. To sectors

What part of the economy does this stock belong to? What is their primary business? Companies are compared inside their sectors and sub-sectors