By : Andy Rodic
Investors who are seeking exposure of the small companies with the maximum growth potential would be attracted to invest in penny stocks. ETFs, otherwise known as exchange traded funds, are superlative tool for gaining exposure.
Penny stock companies, generally, have small market capitalization. In some cases, they may be so small that you may not have ever heard about them and moreover, every index provider has its own definition of these stocks which are regarded as micro caps. So, it is doubtful whether a particular is placed in your port folio.
Penny stocks bear low prices and they are traded in low volumes too. And this low price of these stocks makes it possible for these stocks to position their companies for an upward growth. The major variation between a micro-cap stock and another asset class is that the former has less public information about it because of its size. These companies are much more susceptible and unstable. Micro-cap stocks are the most risky among all kinds of stocks. Some of them are lacking in assets or track record, while others are still in R&D; mode. Penny stocks are more responsive to low trading volume, and any mass of trade can affect their share prices. Owning these stocks can be advantageous, especially with exchange traded funds (ETFs). Anyone would do well with these stocks, if they are receiving the sector exposure and expense ratio they want.
As the economy remains constant in some regions and is declined in others, the quality investor finders, for penny stocks, are becoming more and more valuable. Good investor finders find no interest in selling their services but instead they appoint clients and strategic partners who sell them. Another advantage is that they are not needed to break open their contact base as they have people to do on their behalf. New opportunities pop up everywhere with the global economy change which has been evidenced by the merging of the Chinese and Indian companies with foreign corporation with a public American entity.
Any concrete consulting firm can take up for making its company, a public one but all may not have the required contacts to be honestly considered for full service. If you have a solid business model and are able to locate in IR consultant, then you can sell your business model to them on your corporate strategy and you will be raising capital with lightning speed, if they take you.
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