Friday, January 27, 2012

Companies & Industries to Look at When Penny Trading Stocks

If you are looking to make money with penny stocks, what industries should you look at?

One would be mass transportation. People would want to lessen their gas expenditures and choose to use public transportation instead. However, you would be wise to stay away from luxury or long distance transportation companies because people would rather not spend on luxury items or vacations at the moment.

In short, when you decide you want to diversify your penny stock investment portfolio, look for companies that are in tune with the times. Since the U.S. is in a recession, avoid companies with high end products. Go back to the basics. You will never go wrong with a company whose business is a basic necessity. (although that is not to say that all companies that fall under this category are good investments).

When you have chosen your industry, choosing the company to invest in is not a whimsical choice. It should be based on solid data and figures. So, still continue with the research and you will find your possible pots of gold.

On the other hand, choosing a company whose stocks may have fallen is not something you should disregard. These companies have been on top of their game, so it would be a good idea to take a second look at their organization. These companies are probably intent on getting back on their feet again, like GM and AIG whose stocks can now be bought for under $10. Go ahead and take a serious look at their portfolio - they could be planning something big to get back in the game.

Finally, when you diversify, don't do it just so you can boast of investing in several companies. Avoid impulsive and rash decisions. Take your time when you diversify, choose wisely and do the research and math properly.

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