As an investor, age does matter and so does your current financial status. When you are a bit older, you have things to consider that a younger investor does not necessarily have to concern themselves with yet, namely retirement accounts and protecting a valuable nest egg. This is one reason why penny stocks are much better for younger investors than old.

Exciting

Another difference between older and younger investors is their drive for excitement. Now, this is a general statement stating that there are young people who are very risk adverse and older generations that live for exciting stock picks. Penny stocks are very volatile which means they can take off at a moment’s notice on news and of course they can also suffer sudden drops. Many investors sit at the edge of their seats waiting for the latest news to emerge on picks they may be interested in. Regardless of your age if you can tolerate these highs and lows penny stocks are a great and even fun way to learn investing.

Investment Pools

When it comes to investing, a wise person should be considering three basic pools of money, retirement, emergency funds and midterm goals such as purchasing a home. Now, if you are a young investor with time to allow interest to compound you can put less emphasis on your retirement account and more on your other pools of money. Investing in penny stocks can give you a very substantial pool of money for the other two major cash concerns. Older people with less time to focus on saving for retirement are not in a position to take the risks that come with penny stocks; they need to build that fund now with as little risk as possible.

Time for Education

While there are major differences between penny stocks and expensive stocks when you are a young investor penny stocks are a great way to begin your education. As a younger investor, you are less likely to be familiar with the stock market and investing plus you probably do not have a ton of money to throw into blue chip stock so penny stocks are the perfect answer to both dilemmas. At this stage in the game even losses can become positives when you realize they are an important part of your investment education. It is important to read as much as you can and perhaps follow a penny stock newsletter which will explain to you the reasons why a particular penny stock is taking off and what to look out for in its progress.

Conclusion

There are many reasons penny stocks are better for younger investors, but regardless of your age, you need to remember a few things. Never invest more in any stock than you can afford to lose. It is important to manage your risks in a sensible manner. There is good money to be made in the stock market if you are wise about your investments and remember that profit is always profit and to take profits along the way.

Author Bio: I work to bring you the information you need to get in on the latest developments in penny stock picks. What also helps achieve this is when you follow a trusted penny stock newsletter which you can sign up to receive via email.

Category: Finances
Keywords: penny-stocks,penny-stock-newsletter,free-alerts,otcbb,penny-stock,picksheets