Title: Is It Safe To Buy Penny Stocks Now?
1Penny Stock Research
Is It Safe To Buy Penny Stocks Now?
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4- Hi, My name is Aaron and Im with Penny Stock
Research, today were reviewing our recently
published article
5- Is It Safe To Buy Penny Stocks Now?
6- Stock Investors are clearly happy that September
is over. After the late August correction in US
stocks, September really didnt offer much of a
reprieve. However, October has been great so far
for bulls.
7- In fact, the SP 500 is up about 3.5 already
this month. Even better, the Russell 2000 (a
good proxy for small and micro cap stocks) is up
just as much actually over 3.6.
8- Thats a very good sign for penny stock investors
looking to get back in the game. - Heres a quick look at what the Russell 2000 has
done
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10- You can see the big rebound in the small cap
index over the last week. The Russell 2000 is
making a run at the 50-day moving average.
11- If it can breakthrough, the index may be able to
make a run at going positive for the year.
Currently, its down about 4 in 2015.
12- So is now the time to buy penny stocks?
13- The question of course is, can penny stocks go
positive as a group this year? Its clearly
been a volatile last month or so. The
uncertainty and selling has spooked penny stock
investors who have moved on to higher ground
(safer stocks).
14- But, with the market stabilizing, theres a very
good chance we could see interest return to penny
stocks. Keep in mind, small and micro cap stocks
tend to provide the most value over time.
15- So, savvy investors will want to have this asset
class in their portfolio. If volatility has
settled down, then theres no reason to believe a
buying surge in penny stocks isnt around the
corner. - But has volatility settled down? Its only been
a few days of stock gains. How do we know? -
16- Lets look at the factors.
17- First off, the original spooking of the market
back in August was primarily due to China and the
emerging markets slowdown. Concern over demand
from Chinas flailing economy suddenly became a
concern for many investors.
18- Ultimately though, investors seem to realize that
theres only so much business the US has done
with China. Its not nearly as much of a impact
as many people assumed.
19- As such, the main concern turned to when the Fed
would raise interest rates. Primarily, the worry
was the Fed would be too quick to raise rates.
20- Obviously, market confidence has been more
fragile than many assumed, as seen by how quickly
we corrected in August. Given the concern over
emerging markets, a rate hike at this time could
be a serious blow to bulls.
21- Fortunately, the Fed seemed to realize what was
at stake and declined to raise rates in
September. Nevertheless, Yellen and the FOMC
did not give a lot of guidance as to when they
planned to make the first hike.
22- And, they appear intent on getting the first
increase done in 2015. The market responded to
the Feds uncertainty with more volatility of its
own. But, volatility is like a wild fire
eventually it runs out of fuel.
23- On one hand, investors finally realized the
selling has been overdone considering the
variables in play. On the other hand, a few
economic reports have come in worse than
expected.
24- That means the Fed will have even more pressure
to not raise rates in October, and possibly even
December. Whats more, a rate hike of the quarter
point variety should mean very little to many
penny stock companies
25- at least the ones I would recommend buying.
Considering I recommend shying away from small
companies with a ton of debt, there really
shouldnt be too much concern over rates.
26- As such, now may be an excellent time to find
great values in penny stocks. As always, be sure
to do your research first before making any
purchasing decisions.
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