Why Having A Diversfied Portfolio Of Penny Stocks Or Low Single Digit Stocks Is So Important
Now please heed this word of advice when investing in penny stocks and low single digit stocks. Never put all of your money in a single stock never Regardless of how great the propects appear for the company that your investing in. This is the worst possible thing a investor in penny stocks or low single digit stocks could ever do. If you are placing all of your money in one stock and that stock goes to zero you will have zero money left. Its not necessary to put all of your money in a single stock theirs many stocks with good prospects The problem is you can never be sure what stock will perform very well and what stock will perform very poorly that why its so important to own a fairly good number of stocks The best advice is to own at a minimum 20 stocks Try not to have more than four stocks in the same sector. Diversification is especially important when investing in penny stocks or low single digit stocks. Stocks trading below a dollar are almost always very risky. Stocks trading between 1 dollar and five dollars also can be very risky. The risk profile for penny stocks and low single digit stocks is much higher than the typical twenty or thirty dollar stock. Thats why. Diversification is so very important when investing in penny stocks and low single digit stocks. By investing in different types of companies and different sectors you will not be placing all of your money on one horse. If one company or sector fails to perform well another my perform very well different companies and sectors move in different cycles whats hot today may not be hot tomorrow.