Market Overview

Art of trading penny stocks

If you look at the top 10 performing stocks on U.S. exchanges for 2012 to date, you'll see that seven of these stocks are small caps with market caps of $1 billion or less

As a smart investor you might ask yourself: Why would I invest in high-risk stocks that trade for a few dollars, a dollar, or even less… for pennies?

It's true; these stocks are highly volatile, hard to analyze and very risky.

But this is exactly why investors who can stomach risk should be interested, because with more risk you also have the potential for more reward.

At Investment U we call it “reward opportunity risk.” Simply, you have the opportunity to be rewarded with extreme gains when you take on extreme risks.

Capturing major gains

If you look at the top 10 performing stocks on U.S. exchanges for 2012 to date, you'll see that seven of these stocks are small caps with market caps of $1 billion or less, and three of them trade for less than $5… talk about cheap.

Continue reading this article here.

The following article is from one of our external contributors. It does not represent the opinion of Benzinga and has not been edited.

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