There has been a lot of talk about how 2008 will pan out financially. The word recession has been used a lot, maybe to shock, but maybe not. Let’s imagine for a moment that these recession predictions are correct. How would this affect the stock market? Well, the stock market will still be there even if the numbers change. However, in a recession, everything is relatively penny stock. So even though penny stocks have gotten some bad press, they will still be around through good times and bad.
Recessions are times when all businesses struggle to make a profit. Yet that doesn’t stop people from investing. People are more desperate and have more faith in a company and are therefore willing to take more risks when economic times are tough. During times like these, people can afford to be pickier and avoid riskier actions. Penny stocks are risky no matter the economic situation, but are a great investment if done wisely.
If there was a recession, penny stocks would get a lot more attention since people would have less money to spend and wouldn’t be as picky. There would be less negative talk about a stock that would provide more people than ever with an opportunity to invest. People would see it more as an opportunity than a bet. You see it’s all about perspective and approach. Anyone can lose money doing anything if it’s not done correctly. Penny stocks can make you a lot of money if invested correctly.
All the people who talk badly about penny stocks are either the ones who burned investing in them or the ones who know nothing at all about them except what other people have told them. It makes for some interesting stories, but the truth is that earnings from penny stocks will clash with any other type of stock. Other stocks can make big gains, but certainly not as quickly as penny stocks.
So, will 2008 be a recession? I do not think so. Will this be a good year to invest in penny stocks? Well, of course it will. Just invest with caution. Penny stocks have never represented a bad investment just one that needs to be approached with caution. It’s easy to take the advice of others without really knowing the truth, but including penny stocks in your portfolio is a smart move any day of the week.