To achieve financial freedom, it is advisable to invest your money. This will provide you with a source of passive income. There are many instruments that you could invest in. Some examples of these are stocks. Also known as shares, they represent chunks of a publicly traded company and can rise or fall in value. A popular type of these instruments is the penny stocks. They are stocks which have a value of less than 1 dollar. The low price of penny stocks allows investors to hold hundreds of different shares after investing only a little amount of capital. Thanks to this scale, small individual profits can accumulate into sizable returns. Here is more about the top penny stocks to buy now.
Nature of top penny stocks and when to buy
The top penny stocks to buy now are considered to be extremely speculative and volatile. This is because they have low levels of liquidity, low market capitalization and large spreads between the bid and ask prices. In addition to that, penny stocks have limited levels of disclosure and not enough of a following as well. However, they do have the potential for profit. That’s why millionaire traders still include penny stocks in their portfolios.
Who buys penny stocks
To make profits, the top penny stocks to buy now are those of companies which have a firm grip on their share structure. Some companies perform share dilution so as to raise capital. This is normally done through issuing more shares, implementing strategies such as stock options for employees and performing stock splits. A company that executes these strategies is in financial trouble and needs the money. Therefore, companies that are employing these plans should be avoided. Instead, buy the penny stocks of companies that are reporting profits and do not have any changes to their share structure.
Penny stocks of competitive companies
Studying the charts of companies can indicate if they will be competitive in the near future so as to identify the top penny stocks to buy now. The penny stocks to buy now are those of companies whose industry performance indicates a potential rise in prices. Some examples of these are indicated below.
Financial companies can be a good option for top penny stocks
Financial companies are bound to become competitive due to reforms in the law and are top penny stocks to buy now. The recent tax reform law is bound to benefit these firms. They have posted an average growth rate of 1.8% since the beginning of the current financial year. As such, the penny stocks of companies in this sector are ideal purchases.
Health care companies That offer penny stocks
Some of the top penny stocks to buy now are of health care companies. Health care has seen excellent growth in the last financial year due to innovations in medical technology and the release of highly effective drugs. Overall, health care companies are known to perform well no matter how the overall market goes. As such, penny stocks in this sector are a must-buy.
Buying stocks in retail companies
Companies in the retail sector are also expected to perform in an excellent way in the near future so they are top penny stocks to buy now. A rise in consumerism is expected to happen. Therefore, the stocks of companies which are directly involved in providing retail products are good options to buy. In addition to that, the stocks of retail real estate development firms are also a great choice in this financial season. Seeing as consumers are now increasing their purchases, retail chains will not only stock up but also expand their networks. As such, look out for the retail real estate developers too.
Companies that accept digital currencies compete with penny stocks
Innovations in technology have resulted in digital currency and created the top penny stocks to buy now. Initially thought of as a technological fad, cryptocurrencies have taken the world by storm and shown surprising resilience. Some companies in the retail and service sectors have jumped on the bandwagon and began allowing consumers to pay for their services using digital currency. By staying ahead of the game, these companies are profiting from the rising value of cryptocurrencies. Some of them are public and you can buy their penny stocks. They are ideal options to pick for short and long term returns.
By making the right choices, you can pick the top penny stocks to buy now. Their speculative and volatile nature make them great short term investments. Some of the most ideal penny stocks to purchase are indicated above. They are a sure way to increase your wealth.