By February, it might seem that penny stocks are the hottest things in the economy with six-month gains reaching from as far as 2,339%. However, a key observation that must be seen here is that February is a very desperate time for global recession.
In other words, the huge gains people may be seeing from penny stocks just might be a short burst. It is always best to invest soundly,
According to The Motley, “the global financial system looked ready to topple if you looked at it crosswise. Ford traded at $1.98 a share; Avis stock changed hands for $0.44 a stub. These stocks were priced so that as long as the companies survived, the shares would go up. But back then, whether they’d survive at all was far from certain.”
The short warning here is that you should still think twice before engaging in penny stock investments. The recent precedents are not all long-term patterns. Some are just short bursts.
Source: The Motley Fool
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