Investing in Penny Stocks and Blue Chip Stocks

Investing in penny stocks is probably the smartest move an investor can make. This is because penny stocks are cheap and the price per share is quite low. This has a definite advantage for the small and medium scale investor. The reason is that when people invest in penny stocks, they enjoy two basic advantages. The first advantage is that it is possible to buy a large number of stocks because the prices are relatively low. Again, it is also possible to buy stocks in different industries and this has the advantage of helping the investor to diversify his or her holdings.

Another advantage of penny stocks is the fact that in most cases, penny stocks are usually associated with companies which are just starting out. The point here is that such companies have the prospect to really grow in future. For this reason, the investor can buy the stocks and hold onto them for the long term.

People can begin building their stock portfolio buy buying low price stocks. However, they do not have to stick to low price stocks for life. After a while, the smart investor can branch out and begin to invest in blue chip stocks. These are the stocks of reputable and viable companies and they usually pay dividends. It has to be noted that these stocks are expensive but they are worth the expense.

A very good example of a stock which can be considered a good investment is Google stock. In fact, it makes a lot of sense to buy Google stock. This is because this stock is backed up by the name and the reputation of Google.com. This company is a giant in the search engine business and, over the years, the price of this stock has continued to rise. Investment analysts consider Google stocks great investments because the return on investment is simply great. Investing in penny stocks is a great idea but it also makes a lot of sense to buy Google stock.