Best Stocks to Buy

Are Penny Stocks the Best Stocks to Buy?

Penny stocks represent great potential for smart investors, but they aren’t for everyone. How to know which stocks are the best stocks to buy for you? You must first know what kind of investor you are.

Investors come in several different temperaments. There is no “one size fits all” ideal type of investor. Everyone has a different tolerance for risk, and much depends on a person’s age, philosophy, experience, net worth, and knowledge.

There are four basic types of investors. For each type, the best stocks to buy will be those which give the investor confidence and peace of mind.

The first kind of investor is the Traditional Saver. The Traditional Saver seeks to minimize risk as much as possible, and invests only where the principle is virtually guaranteed. The Traditional Saver is not so much concerned with accumulating wealth, as they are with protecting the wealth they have. These investors usually don’t buy stocks at all, but invest in bonds and similar guaranteed instruments.

The second kind of investor is the Conservative Investor. The Conservative Investor is prepared to take a little more risk than the Traditional Saver, but only in blue-chip stock, high-yielding mutual funds and the like. These are typically the best stocks to buy for this type of investor because they are willing to go out on a limb for a better return – but not too far out on the limb!

The third kind of investor is the Speculator. The Speculator likes to find higher returns and is willing to take more risk to get them. The best stocks to buy for this type of investor will deliver a diversified portfolio. There will usually be a mix of blue-chips, foreign or other high-yielding stocks, energy and commodities stocks, and occasionally a few jackpot pink sheets or ten bagger penny stocks.

The fourth kind of investor takes things a step further that the Speculator – he is an Aggressive Speculator. This kind of investor knows what he wants first and foremost – profits. He isn’t afraid to move aggressively and quickly on a good play. Aggressive Speculators will take a position in fast-moving commodities options, new stocks, penny stocks and other potentially highly lucrative trades that require minimal investment with the chance of great returns.

The Aggressive Speculator tends to be highly flexible, short-term oriented, and quick to make up their mind. For this type of investor, penny stocks, with their small entry point and high potential for profits are definitely among the best stocks to buy.