Penny Stock Seasonality

Jan 27, 2012 by admin

People that trade or want to trade penny stocks often wonder why these stocks seem to move better during certain times of the year. It’s due to one main factor: seasonality. Though it may seem hard to understand why penny stocks only perform well during certain times of the year, it is a truth that you must grasp if you want to be a successful micro cap stock trader or investor.

Most penny stock newsletter websites will articulate this truth to their members. This helps their subscribers only to invest in penny stocks that have a fair chance of going up in value. The alternative is to invest in stocks that are illiquid and have no real chance of appreciating in price in the short term.

The key to understanding penny stock seasonality is simple. They perform well in the first 4-6 months of the year. The rest of the year they are typically dead for the most part. That doesn’t mean you can find opportunities to trade stocks in the second half of the year, but it does mean there are far more stocks that are moving to the upside from January to June. Sounds elementary doesn’t it? I know this to be true from experience, however. Take this into consideration before you open a trading account and start to put your money into penny stocks.

Again I want to reiterate that many penny stock newsletters make their subscribers aware of what I just described about seasonality. By doing so, they help educate people and lessen the amount of people who end up failing at penny stock trading. This is quite important since statistics show and continue to show that most people fail at succeeding with penny stocks. Owners of credible penny stock chat rooms also help their members to understand seasonality. Never forget this truth and you will also increase your chances to grow your investment portfolio and accumulate wealth.