Here is a scenario all-too familiar to many people. You go see your certified financial planner, and he or she strongly encourages you to diversify your portfolio to make it recession proof. That can mean a variety of strategies and mixing stocks – perhaps utilities, alternatives, agribusiness or who knows what – but unfortunately a lot of people ignore that sage advice. Their idea of diversifying may be nothing more than investing in a few mutual funds; all the while they ignore a potentially explosive opportunity – international penny stocks.
The lasting power and growth potential of a portfolio will always be its diversity. An astute combination of high risk investments and with low risk returns to offset a loss can be a key to success in the investment world. Using penny stocks to dip your toes into the world of high risk investments is a good starting place, particularly in the global market – which can be a major on-ramp for profits.
If you are interested in the combination of hot penny stocks and international markets, then we have some penny stock tips worth considering for any investor, first time or seasoned pro. None of these are a magic bullet, but taken in combination may help you focus on stocks that could result in favorable returns over the long run.
Zero In on Small Global Companies
Penny and micro cap stocks may be risky investments, but you can minimize that two ways:
- Only invest a small amount of money in one type of stock from funds you have set aside as “risk investment” capital.
- As with any type of investment, diversify your portfolio and try not to put more than 10 percent of your cash into a single penny stock.
Stay with what is Popular
When you were in school, there was always a kid nicknamed “Mr. Popularity” or “Miss Popularity” and it drove you crazy. Maybe for a moment, you wanted to be that person, but why? In retrospect, it is because popularity often equates to being well known. Everyone knew who Mr. Popularity was, and the same goes for solid, international penny stocks. Stick with what you know. If a market in North America has been popular but lately become saturated with a dearth of copycat goods or services, the same market may be getting ready to bust wide open overseas.
Stability Equals Potential
As is the case with companies listed on major exchanges, a characteristic of growth potential among international penny stocks is stability. Do your research, and pay attention to how long a company has been in the market with a particular product, the names and tenure of their leadership is, and so forth.
A final tip is to know where international penny stocks are traded. In Europe, it is the Alternative Investment Market, the venerable London Stock Exchange, the independent Off Exchange, the DAX in Frankfurt, and the CAC-40 Index in Paris. Viable penny stocks also are found in Asia, the Middle East, and Canada through the Toronto Stock Exchange.
