Much has been made about what 2008 will look like financially. The word recession has been thrown around a lot, maybe because of its impact, but maybe not. Let’s assume for a moment that these recession predictions are accurate. How would that affect 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 gotten some bad press, they will always be there through good times and bad.
Recessions are times when all businesses are struggling to make a profit. However, that does not stop people from investing. People are more desperate and then they exercise more faith in a company and are therefore willing to take more risks when economic times are tough. At times like these, people can afford to be more picky and avoid the riskiest actions. Penny stocks are risky no matter how the economy is doing, but they are a great investment if done wisely.
If there was a recession, penny stocks would get a lot more attention, since people would have less money to spend and wouldn’t be as picky. There would be less negative talk of a stock that would present an investment opportunity to more people than ever before. People would see it more as an opportunity than a gamble. You see, it’s all about perspective and focus. Anyone can lose money doing anything if it is done incorrectly. Penny stocks can make a lot of money if invested correctly.
All the people who badmouth penny stocks are the ones who have been burned investing in them or who don’t know anything about them except what others have told them. It’s an interesting story, but the truth is that penny stock gains will kick butt against any other type of stock. Other stocks can make big profits, but definitely not as fast as penny stocks.
So will 2008 be a recession? I don’t believe it. Will it be a good year to invest in penny stocks? Well, of course it will. Just invest cautiously. Penny stocks have never been a bad investment, just one that should be approached with caution. It’s easy to follow the advice of others without really knowing the truth, but including penny stocks as part of your portfolio is a smart move any day of the week.