Most investors agree that a portfolio should have both blue-chip stocks and high-quality growth stocks. However, it’s also necessary to have 10% to 15% of expose in your portfolio to high-risk high return stocks. It’s these stocks that can be healthy return catalysts.
To a large extent, these high-risk high return stocks come from the penny stock universe. I would classify these as fundamentally strong growth stocks that trade under $5. Of course, there are purely speculative stocks among penny stocks, but that’s not my focus. I would prefer to hold potential 10-bagger stocks that have a sound business model. If business developments remain positive on a sustained basis, these stocks can deliver 20x or 30x returns.
Let’s discuss the reasons to be bullish.
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