Penny Stock Fortunes Begin With One Investment

With the stock market at levels not seen in years, the time for investing is now, but if you are like one of the millions of Americans who have never invested before, it can be a bit confusing figuring out where to start. The world of investing is very jargon-heavy and the risk involved with investing can scare off some people.


A great place to get your feet wet with investing is with penny stocks. Penny stocks are any stock with a value in single digits. They are a popular first investment because the initial investment amount can be very small, but the payoff can be quite large if you do your homework.


Pretty much every company out there started as a penny stock at one point or another. Even the biggest companies on the block started out as an idea someone had that was turned into a success through years of hard work. Penny stock fortunes can be made, but you can’t simply throw your money at any stock with a value under $10 and hope for the best.


There is a huge amount of stock research out there, it is up to you, as an investor, to read up and choose which ones have the brightest future.


Many people believe that penny stocks are always companies that are up and coming and not established. This isn’t always true. For instance, CitGroup (NYSE: CIT) is a company that we’ve all heard of that currently qualifies as a penny stock.


Many experts believe that the market has overreacted greatly to their recent troubles and that the positives this company still has outweighs the small risk you would undertake by investing in it. It is amazing to think of such a well known corporation like CitGroup being a smart penny stock investment, but it is!


Pervasive Software (NASDAQ: PVSW) is another company that many industry insiders have heard of that is widely considered to be a smart penny stock investment. With shares around $4, Pervasive has shown strong growth in recent months as sales for their integration software has increased significantly.


Companies like Pervasive actually go against the conventional wisdom you would apply when it comes to picking investments during an economic downturn, but once in a while, a companies’ outlook is so bright, you can’t help but see success in their future and Pervasive fits that description to a tee.


One final stock we’ll look at is Lion’s Gate (NYSE: LGF). With share prices hovering around $7, this penny stock has already shown exceptional growth over the last few years. The Vancouver, British Columbia based film and production company benefited greatly from the provincial and national tax credits given to Hollywood filmmakers who choose scenic Vancouver to shoot films in, and with the sudden swing in the exchange rate over the past few months, Canada is again back at the top of every film maker’s list of places to make movies.


As long as the US dollar is trading at $1.20 or more, Lion’s Gate’s profits are sure to have a healthy roar.

Financial Investment

Investment is the choice by the individual to risk his savings with the hope of gain. Rather than store the good produced, or its money equivalent, the investor chooses to use that good either to create a durable consumer or producer good, or to lend the original saved good to another in exchange for either interest or a share of the profits for example a surety bond The investment decision (also known as capital budgeting) is one of the fundamental decisions of business management: Managers determine the investment value of the assets that a business enterprise has within its control or possession.


These assets may be physical (such as buildings or machinery), intangible (such as patents, software, goodwill), or financial (see below). Assets are used to produce streams of revenue that often are associated with particular costs or outflows. All together, the manager must determine whether the net present value of the investment to the enterprise is positive using the marginal cost of capital that is associated with the particular area of business.


In finance, investment=cost of capital, like buying securities or other monetary or paper (financial) assets in the money markets or capital markets, or in fairly liquid real assets, such as gold, real estate, or collectibles. Valuation is the method for assessing whether a potential investment is worth its price.


Returns on investments will follow the risk-return spectrum. Types of financial investments include shares, other equity investment, and bonds (including bonds denominated in foreign currencies). These financial assets are then expected to provide income or positive future cash flows, and may increase or decrease in value giving the investor capital gains or losses.


In real estate, investment is money used to purchase property for the sole purpose of holding or leasing for income and where there is an element of capital risk. Unlike other economic or financial investment, real estate is purchased. The seller is also called a Vendor and normally the purchaser is called a Buyer. Within personal finance, money used to purchase shares, put in a collective investment scheme or used to buy any asset where there is an element of capital risk is deemed an investment.


Saving within personal finance refers to money put aside, normally on a regular basis. This distinction is important, as investment risk can cause a capital loss when an investment is realized, unlike saving(s) where the more limited risk is cash devaluing due to inflation. Too bad Wall Street didn't take that to heart.


Poor risk management practices played a role in the financial industry's downturn by unnecessarily exposing companies to dangerous investments, according to observers and industry reports, and the result could translate into big new technology investments for the financial industry.