A Spiraling Market And Rising Penny Stock Opportunities

By Marouane Augusta

It has been a wild couple of weeks on the global markets. But is the latest slide grinding to a halt...or just taking a breather before tumbling some more? And rather more importantly, what does it mean to shrewd penny stock speculators?

The Street latterly stumbled to its worst week of the year, and worldwide exchanges dropped seriously on fears about rising rates and slowing expansion. After rising virtually 9% in the 1st 4 months of the year, the Dow economic average has fallen about 6.5% from a six-year high, reached May ten, 2006.

Stocks have been ailing because penny stock backers fear the Federal Agency may be so concentrated on inflation that it ignores indications of a business slowdown, raises rates too high and sends the economy into a recession.

World markets were sent reeling last week after golden-tongued U.S. Fed Reserve Boss man , Ben Bernanke surprised penny stock stockholders in exclaiming the Federal Agency will continue raising IRs to keep inflation under control.

And that call will have a direct effect on the penny stock exchange. Higher rates hurt penny stock costs because speculators believe it'll curb business expansion and corporate profits.

But why is inflation heating up? Higher energy costs. Traders and penny stock investors are also worried that with the hurricane season officially under way, Gulf Coast refineries and oil production sites could be damaged again this summer and fall.

And higher rates have the capability to affect the whole economy. Financing fees on master cards will rise. So too will rates on mortgages and mortgages, putting extra strain on house purchasers and a softening home market. In the final analysis it will be more costly to borrow for growth.

But does this signal doom-and-gloom for the penny market?. While the temptation to sell everything can be overpowering, some see this as an amazing opportunity. "I wouldn't be selling. I'd are buying," claimed one NY researcher.

So how exactly is this an opportunity? It just so happens that many companies caught in the market's downward spiral are cheaper than they were a few weeks ago. And as any seasoned penny stock investor will tell you, buying a great penny stock when it's been beaten down isn't a bad way to make money over the long haul.

If you can stomach some of the volatility that is. While many blue chip financiers have problems handling the market's's par for the course.

Hence "snap out of it," asserted another watcher. A month of dizzying selling has brought the markets into an interesting range. Is it really possible the markets will fall more? Completely. In fact, no penny stock is a dead cert. But one thing is totally sure : "Stocks are much less expensive now than they were 2 months ago. ".

About the Author:


Post a Comment