[mage lang="" source="flickr"]penny stock fortunes[/mage]
Could I become a billionaire by investing into growing small cap penny share companies?
I am 17, nearly 18 years of age. I am looking to trade penny stocks as soon as I turn aged 18. I know quite a lot about investing using various vehicles that can be used to invest, i.e. CFDs, options, forex and penny shares.
Now, I personally would choose penny shares to begin with because you can get very good returns on them with your money. I know for a fact that if you had invested £100 into Microsoft when it first began you’d be sitting on a £1 million fortune, or if you invested £10,000 into Wal-Mart when it began, you’d have £130 million!
What I’d like to know is if you had say £100,000 and you invested into a company like Microsoft when it first began because you saw it was the future of an entire industry, could you end up with £1 billion, or even £10 billion if you took a risk and had £1 million to invest. Would this work and has anybody in the history of investing ever done something like this and made that much money out of a reletively small investment?
Most or possibly all CFD providers don’t offer penny stocks.
You don’t need to buy penny stocks if you want to trade CFD’s, options or trade with a margin account because the leverage decreases the amount you put down and increases your potential return.
I’ll give you an example. Let’s say you want to buy 1000 Cadbury shares at 5.50 pounds. That would be 5500 pounds total value. If a CFD provider offers 5% margin, then the margin required for that position would only be 275 pounds. So if it goes up by 27.5p you’ve doubled your money
It’s best to start out investing in companies such as those in the FTSE 100 index with your own money for a while. Leverage can increase you potential profit, but it can also increase your potential loss.
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