High Risk Stocks: Are You Investing In Penny Stocks Or Speculating With Penny Stocks?

| July 14, 2015

investingHigh Risk Stocks: Are You Investing In Penny Stocks Or Speculating With Penny Stocks?

Do you want the truth about penny stock speculation?

This is a topic that drives me mad.  I hate it when I see so called “normal” investors talking about penny stocks.


Because they always stick their nose up in the air and sniff at penny stocks.  They say, in not so many words, you can’t invest in penny stocks… penny stock traders only speculate!

This commentary makes no sense to me… and it makes me mad.

Let me give you an example…

If I were to ask all 80,000 of you dear subscribers, readers, and followers about penny stocks, very few of you would use the word “speculation”.

Because speculation has a very bad name.

Speculation implies something is fraught with risk and the unknown.  It implies speculators are taking wild guesses and tossing out crazy hunches.  It implies these are high risk stocks.

Often when someone speculates, it’s another way of saying they’re gambling.

And that’s what gets me so riled up.

Investing In Penny Stocks Is NOT Gambling Or Speculation…

We don’t talk about gambling with your money here… We don’t speculate!

I’d never suggest you run out and buy a stock based on a hunch… or a guess.

We don’t gamble.

That’s why I hate it when investors say trading penny stocks is all speculation.

That word carries more baggage than some ex-girlfriends of mine!

Now with that said, penny stock investing carries risk… lots of risk.  But everyone knows that.  These aren’t government bonds we’re buying here.  These aren’t shares of $GE or $IBM we’re investing in.

No.  We’re looking for undiscovered, unknown, undervalued stocks.

We’re looking for those little acorn-like companies that have the potential to grow into giant oaks!

And this type of investing means risk.  Every dollar you put on the line is at risk of being lost.

You can lose your investment dollars through bad management decisions, horrible company performance, changes in technology, and even market scammers.

So, yes my friends, buying penny stocks does have risk… but it also has huge upside returns.

And to gather up those big gains, we’ve got to INVEST!

The Difference Between Investing In Penny Stocks And Speculation

I bet you’re wondering… If we don’t speculate with penny stocks, what do we do?

I don’t know about you, but I’m an investor in penny stocks.

And I know that statement is making some old time investment professionals roll over in their grave!

Look, investing in penny stocks isn’t much different than investing in blue chips.

Think about it.

Before you buy shares of big blue ($IBM), what are you thinking?

You’re probably thinking if I buy here, the stock’s going to go higher and I’m going to make money.

Do you think any differently when you buy penny stocks?  I hope not!

When you start to look at the market and you’re searching for a big Fortune 500 company to buy… you don’t pick one with the best name do you?

Of course not… you do research, you focus on hot industries, and read about their products and services.  You study their press releases and analyze the financials.   You look at the technicals on the charts.  It’s the same thing you do when you buy penny stocks.


After you’ve made your investment, you follow-up and monitor your holdings.  You sell off the bad performers and add to the big winners.

Well, you do the same thing with penny stocks.

So… how is investing in penny stocks different from investing in blue chip stocks?

Right… it’s not any different at all.

Now you know why I cringe when other investors use the word “speculation” and “penny stocks” in the same sentence!

What do you think?

Am I on point? Or have I missed something big?  Leave a comment on the website or shoot me an email.

Good investing…

Brian Kent

Note:  If you’re interested in learning more about Brian Kent’s Penny Stock All-Stars premium service… and learning about the stocks we’re trading for profit… you can get the inside scoop on penny stocks here.

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Category: Investing in Penny Stocks

About the Author ()

Brian Kent is the Editor for PennyStockResearch.com. He also pens Penny Stock All-Stars, an investment advisory focused on discovering small-cap and micro-cap stocks that are destined to become the market's next Blue Chips.