Investing in Silver Penny Stocks

People have been investing in gold, platinum, and silver precious metals since times unknown. This is because the values of these are increasing continuously. Among precious metals, gold was considered to be the most valued. Later the focus shifted towards Platinum. Silver was considered as a penny stock, i.e., stocks below $10. However, with changing times, the economic trend started changing.

The current economic scenario is very interesting. This is so because silver is breaking away from its downtrend. Earlier, silver was considered as the cheapest precious metal and it never displayed signs of increasing in value. The downtrend actually hit a bottom in late December, 2011. The silver stocks over $10 increased in value and currently they are just below $37.00 and the upward trend is true for all other precious metals. Taking into consideration the current economic scenario, it appears that the trend from being bearish to bullish is to here to stay for some time and the value of silver stocks present a wide scope.

The rise in the value of precious metals and silver seem to be a great form of investment in penny stocks. This seems to be a blessing for all the junior mining companies which extract silver. There are different stages in these junior mining companies. While some are early-exploration companies, there are others that are late-stage silver producers. When investing in such companies, the investor must consider two points, viz. how the silver penny stocks fit into the particular portfolio and what is the risk percentage. Once these are considered and accounted there are many junior mining companies doing brisk business in silver extraction. They have numerous business models and a huge future potential.

Some leading silver mining companies have displayed an interesting technical breakout. They have strong technical features in line with the basics. This means they have bigger funds which add money to the market. This addition to the market is achieved by buying shares and trusting the company. Despite of hitting a low in December 2011, companies bounced back and made a higher low in the month of February. Currently, they have crossed the 200 mark. This is an extremely bullish trend for the markets and the investors must keep their eyes open for all the silver mining companies. We have many more Stock Market Investing Articles Now Available.

There are some other companies trading at lower price-to-earnings ratio and they are estimated to have a higher book value than others. Some other companies do not extract silver alone. They extract other precious metals too. Investing in such companies is always profitable because the value of such companies increase by manifold than those engaged in extracting silver alone. The shareholders are sure to rake in huge benefits from such companies.

Although silver penny stocks seem promising, risks are obvious. Mining companies have positive as well as negative points which the investor must weigh before investing. They must weigh the risks and understand how the penny stocks of precious metals fit in their risk frames. Caution is the word before investing since they offer a lot of upside potential. We have many more Investing Help Articles Now Available.