Penny Stock Returns

Why do people invest in penny stocks if they are so risky? The answer lies in a few facts as well as a few misconceptions about penny stocks. First let us look at the positive side of how penny stocks can be more profitable.

It is a well-known fact in finance that risk and return have a positive correlation. This means that an investment that carries greater risk will also give higher returns. The reason for this is very easy to understand and is almost intuitive. Suppose you had $10,000 to invest and two options A and B. Option A is a secure government bond that gives you 5% return, while option B is a higher risk investment in a company that will pay you only if it makes profits. Assume that this company has a history of making 5% Profits over several years and is likely to continue on the same lines.

That is, you can expect to get a return of 5% in future years, but that is subject to the company making the same level of profits. Where would you invest your money? If the returns are likely to be the same and if you are a sane person, you would obviously invest in the risk free option. Now suppose, option B were to pay you not 5% but 15% consistently, you might be tempted to put your money in it. In other words, a higher return can make you to invest in a riskier venture.

Since penny stocks are higher risk alternatives compared to regular stocks, the only way they can attract investment is by holding out a promise of higher return. How would a penny stock offer a higher return? This will be done not directly by the stock or the company, but by market forces. The market price of a stock is fixed on the basis of a few factors such as its intrinsic value and the return yielded by it. The market price of a stock divided by the return it gives is known as the price-earnings ratio.

For example, if $10 stocks were to be traded in the market at $20, and the company earns a net income per share of $1, the price-earnings ratio is 20. The price-earnings ratio will be higher for solid stocks that are known to be backed up by good management, have a history of consistent and good performance, and are perceived to be stable. The price-earnings ratio for stocks that are riskier, unknown and do not enjoy a positive perception will be much lower. This means that as against the example of price-earnings ratio of 20 that we assumed for a stable and well-known stock, a penny stock may have a much lower price-earnings ratio, say 3 or 4. Actual figures will depend on a number of other factors also.

Because of this, a penny stock will be priced lower for the same level of net income, and will therefore yield a higher return on the investment.

5 Medicinal benefits of Sugarcane

Sugarcane is a tropical, perennial grass that forms lateral shoots at the base to produce multiple stems, typically three to four meters high and about five centimeters in diameter. The stems grow into cane stalk, which when mature constitutes approximately 75% of the entire plant. A mature stalk is typically composed of 11–16% fiber, 12–16% soluble sugars, 2–3% non-sugars, and 63–73% water. A sugarcane crop is sensitive to the climate, soil type, irrigation, fertilizers, insects, disease control, varieties, and the harvest period. The average yield of cane stalk is 60-70 tonnes per hectare per year, however this figure can vary between 30 and 180 tonnes per hectare depending on knowledge and crop management approach used in sugarcane cultivation. Sugarcane is a cash crop , but it is also used as livestock fodder. [ 6] 1. Sugarcane juice increases vigour and sexual ability. 2. improvement takes place in burning in urine, thirst, cough, fever, indigestion, joint pain et

Investing in penny stocks

Investing in penny stocks The first question is 'To invest or not invest' in penny stocks. This is largely a personal decision that reflects your risk profile. If have the capacity as well as the nature to take greater risks, you could be looking at penny stocks. If your financial position is not very strong, and you have little spare money to invest, it is better that you keep off penny stocks altogether and look at established stocks only. Similarly, even if you have a lot of money to spare but are generally averse to taking risks, it is better that you don’t invest in penny stocks. If you are the kind of person, who likes to take risks in order to increase your returns, and can afford to lose some money if it comes to that, then you could look at penny stocks.

Shocking and Interesting Facts about Stuttering

Shocking and Interesting Facts about Stuttering How do people usually react when they hear someone stutter? They most likely make fun of the stuttering person. And how do people usually perceive someone who stutters? Stupid, dumb, or even good for nothing. A person’s competence or personality is always judged based on how good a speaker he is. That is a sad reality for many people who tend to stutter. Whether you are among the 1 percent of the world’s population that stutters or not, it helps to know and understand the basic facts about this speech condition to put things in a better perspective. This is especially helpful for parents with children who stutter.

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