3 Ways That World Events Cause Penny Stocks Movement
When it comes to buying and selling penny stocks, world events are likely the main cause of market movement. Wars, natural disasters, and other geo-political, and economic events can all have a profound effect on both penny stocks and blue chips.
Now, the most common reasons that a penny stock will move tend to be on a smaller scale. This includes industry-wide happenings, company-specific events (like earnings reports or analyst ratings changes), or even just the rumor mill. But, world events are still a major driver of stock prices. As a result of this, it is crucial to be aware of any large-scale events that could impact the stocks you are interested in.
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In addition, it is important to be aware of how these events could affect the overall stock market, as this can also have an indirect effect on penny stocks. Right now we have several events that are at play including Covid, Monkeypox, geopolitical tensions, inflation, and much more. And because of that, it is more important than ever to be up-to-date on the latest happenings. With all of this considered, let’s take a look at how these events could be profitable for you and your trading.
How To Use External Events to Make Money With Penny Stocks
- Events Cause Stock Market Movement
- Some Industries Are More Volatile Than Others
- What Events Are Going on Right Now?
Events Cause Stock Market Movement
When you invest in penny stocks, you’re essentially betting on the future performance of a company. If you think a company will do well, you’ll buy its stock, and if you think it will do poorly, you’ll sell. The movement of stocks is dictated by the collective actions and expectations of all the investors in the market.
And well it does go deeper than this, this notion is the basis of how penny stocks and blue chips trade. Now, when it comes to penny stocks, we see that speculation is often much greater. Therefore, world events have a much larger impact on the prices of these stocks.
Some examples of events that can cause stocks to move include:
- Earnings releases
- Analyst upgrades/downgrades
- FDA announcements
- Mergers and acquisitions
- Natural disasters
- Political turmoil
- War
In general, stocks will move higher when there’s good news and move lower when there’s bad news. But it’s not always that simple. Sometimes, stocks will move in anticipation of an event. For example, a stock might start to rise a few days before an analyst releases a positive report. And sometimes, penny stocks will move even though there is no news. But, staying ahead of the game will always be your best bet for profitability.
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Some Industries Are More Volatile Than Others
Why are some stocks more volatile than others? The simple answer is that some penny stocks are more volatile because industries have different rates of volatility. For example, we often see that biotech penny stocks are more volatile than stocks in other industries. This is because the biotech industry is by its very nature a high-risk, high-reward sector. And as a result, investors are often willing to take on more risk when it comes to stocks in this sector in hopes of achieving greater rewards.
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Another factor that can affect the volatility of stocks is the size of the industry and how often news comes out. For example, tech penny stocks can be highly volatile because there is always new information and news coming out about different companies. This can make it difficult for investors to keep up with all the changes and make informed decisions about where to invest their money. But, it can also present a lot of opportunities for investors of all types.
What Events Are Going on Right Now?
Right now we have a large range of events that are at play. These events are causing major movement with stocks, and it is important to pay attention to what is happening in order to make the best investment decisions.
The main factors at play right now include rising inflation, climbing interest rates, geopolitical tension, Monkeypox and Covid, and more. While this seems like a lot to keep track of, it is important to do your research and stay updated on current events in order to make the best decisions for your investments.
Penny stocks are a great way to invest your money and can provide you with a large return if done correctly. However, stocks can also be very volatile, so it is important to understand what you are investing in and how to use what is going on in the world as an advantage.
3 Penny Stocks to Watch Right Now
- Alto Ingredients Inc. (NASDAQ: ALTO)
- Oncternal Therapeutics Inc. (NASDAQ: ONCT)
- Pop Culture Group Co. Ltd. (NASDAQ: CPOP)
Are Penny Stocks Profitable in 2022?
Whether or not penny stocks are profitable right now completely depends on the current state of the stock market. All stocks have been volatile recently, so any stocks, not just penny stocks, are risky right now.
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However, with the market moving up and down frequently, there could be opportunities to buy low and sell high with penny stocks. An important aspect to remember is that penny stocks are volatile and that movement needs to be addressed by your strategy. So, with all of this in mind, do you think that penny stocks are worth buying in 2022 or not?
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