There has been a lot of talk about how 2008 will turn out financially. The word recession has been thrown around a lot perhaps for shock value but maybe not. Let’s pretend for a moment that these predictions of s recession are accurate. How would that effect the stock market? Well, the stock market will always be there even if the numbers change. However, in a recession, everything is relatively a penny stock. So even though penny stocks have received bad press they will always be there during good and bad times.
Recessions are times when all companies are struggling to make a profit right. Yet that does not stop people from investing. People are more desperate and then to exercise more faith in a company and hence willing to take more risk when economic times are tough. During times like these people can afford to be more picky and avoid the more risky stocks. Penny stocks are risky no matter how the economy is but are a great investment if done wisely.
If there was a recession then penny stocks would get a lot more attention since people would have less money to spend and would not be as picky. There would be less negative talk about a stock that would present more people than ever before with an opportunity to invest. People would see it as more of an opportunity than a gamble. You see its all about perspective and approach. Anybody can lose money doing anything if done incorrectly. Penny stocks can make you a lot of money if invested in correctly.
All the people who talk bad about penny stocks are either the ones who have got burned investing in them or the ones who know nothing at all about them except what others have told them. It makes for interesting stories but the truth is that the gains of penny stocks will kick butt against any other stock type. Other stocks can make great gains but definitely not as quickly as penny stocks.
So will 2008 be a recession? I do not think so. Will it be a good year to invest in penny stocks? Well of course it will be. Just invest cautiously. Penny stocks have never represented a bad investment just one that should be approached with caution. Its easy to take the advice of others without really knowing the truth but including penny stocks as a part of your portfolio is a smart move any day of the week.