Is there money to be made in penny stocks?

Question

I invested about 4000 dollars in a winery I bought the shares for 10 cents each. was this smart or a mistake? is there somewhere else I could have invested the money in hopes of a little return?

Answer 1

you wont gain much in the short term.  Wine prices generally increase with the age of the wine.  You wont lose money either.  Would be probably similar to having the money on deposit.  There are obviously more ventures you could have tried.  Risk v Return is the main key  More risk = more return,  it all depends how much risk you are willing to endure.

Answer 2

Yes there is money to be made in penny stocks... as long as you have the follow;

5-10 years in trading experiance.

Are excellant at money management (position sizing, good stop policies etc).

Understanding that you can lose 70% of your trades and still do well.

Always have many positions on at once.

Know at least basic tyechnical analysis (the more you know.. the better)......................

Never;

Have only one position. It is simply gambling... with poor odds.

Answer 3

When buying penny stocks, like any other security investment, you never invest 100% of you investing capital. Penny stocks are fun to trade, but you should never count on them to be considered part of your primary investment objectives.

If you invest/trade in penny stock you should never put up more than you can afford to loose and you should assume you will loose it all. Unlike regular securities, penny stocks usually do not let you use risk cutting procedures (options and/or stop orders) since most are not traded in a regulated market place.

They say when you buy securities you have a 50%-50% chance of making money, when you buy penny stocks you have a 50-50-90% chance, 50-50 chance of making money and a 90% chance of loosing money.

You made your investment so there's no sense in looking at what you should have done.   The price of a stock is what other investors and/or traders think about the stock.  

Visit the Stock Wire.com http://www.stockwire.com/ and you can ask what other pennys stock buyers think about your investment or they may know the company and give you some moral support.

I know that I was not a big help with your problem, but at least you know where you can discuss your situation with other pennystock buyers.

Answer 4

Cinder E

Can't tell you if it was smart or a mistake without seeing the charts.  When you buy penny stocks, or any other stocks make sure that there is good volume.  When you bought, did you have a statagy or were you going to "hope" the stock up?  If you are going to trade stocks, make sure you use an online trading account. I recommend Ameritrade or E-Trade.  They have great free tools.  If you don't have a strategy, read "wallstreet money machine" by wade cook.  Easy reading.  Look at his strategy for rolling stocks.  His system works.  You can buy the book used in new shape for $.01.  Another book that lists all strategies.  Also easy reading "What works on Wallstreet" by James O Shannesy.  Lots of charts, but easy reading.  Good luck.