Depending upon your personal constitution, at some time or another you have probably been inclined to throw a little mad money in the direction of some of the more volatile – and potentially lucrative – stocks.

ALSO READ: Throwback Thursday: The 4 Most Common Investing Myths People Fall For

They can indeed be enticing if for no other reason than the ability to invest paltry sums with potentially stratospheric returns. So, what about the viability of penny stocks and over the counter securities? Is there anything wrong with having a little mad money stash just to have fun with? Not necessarily.

In fact, if handled correctly it might actually be possible to have a little fun and maybe make money along the way.

1. Volume Matters

*** SPECIAL ALERT -- May 10, 2020 -- Motley Fool Stock Picks On FIRE! ****

The recent Motley Fool stocks picks, even with this COVID crisis, are STILL performing well and beating the SP500! Here are some of their most recent picks and their performance:
  • Shopify (SHOP) – April 2, 2020 pick and it is already up 90%
  • Zoom Video (ZM) – March 19, 2020 pick and it is already up 16%
  • DexCom (DXCM) picked Feb 20, 2020 right before the market crashed and it is still up 17%
  • Tesla (TSLA) picked January 2, 2020 before the crash and it is up 77% compared to the SP500 -12% so it is ahead of the market by 89%
  • HubSpot (HUBS) picked December 5, 2019 and it is up 4%
  • Netflix (NFLX) picked November 21, 2019 and it is up 37%
  • Trade Desk (TTD) picked November 11, 2019 and up 50%
  • Zoom Video originally picked Oct 3 and it is up 87%
  • SolarEdge (SEDG) picked September 19, 2019 and it is up 20%
  • Zoom was also picked October 3, 2019 and it is up 95% since then.
The average stock they've recommended is up a life-changing 346% - more than 4X the return of the S&P 500 ! Now, no one can guarantee that every pick in Stock Advisor will have the same mind-blowing returns as Netflix and Disney. But you sure don't want to risk missing out.

Normally the Fool service is priced at $199 per year but they are currently offering it for just $99/year if you click this link

Hurry! Order now so you will get their next stock pick! Here is the expected schedule of release dates for their stock picks...:

  • June 4 - Tom's New Recommendation
  • June 11 - Tom's New Best Buys Now
  • June 18 - David's New Recommendation
  • June 25 - David New Best Buys Now

CLICK HERE to get The Motley Fool's Stock Picks for just $99 per Year! 

Nothing is worse than buying a stock that you can’t sell.

Take a look at the daily (or in some instances – weekly) volume to make sure there is someone on the other end of the transaction. Novice investors are often surprised how limited volume can be and are taken aback when their sell order isn’t immediately executed.

2. Sales and Earnings.

Yes, it sounds old fashioned especially in light of the pop culture investing mentality but fundamentals still hold true.

Stash - Join millions of new investors
Investing, simplified.

Stash is more than an investment app. You’ll have access to tools that can help you become a confident investor. Become an investor in just two minutes and get $5 free. From innovation to the environment, invest in what matters to you. With Stash, you can invest in a selection of stocks and ETFs that is carefully curated by our investment team. Get your FREE $5 NOW. Or read our full Stash Review.

3. Percentages Mislead.

Especially when dealing with micro or penny stock. It just makes sense. If a stock is trading at a $1 and doubles to $2 then the percentage alone skews the total picture. Remember the Law of Diminishing Returns.

4. Use Caution.

Setting aside a little mad money for those fun investment crushes is a great idea – just don’t go overboard. Depending upon the total size of your portfolio there isn’t anything
wrong with using 2% to 10% of your investment dollars to roll the dice and try out your luck.

For more information, head over to Wall Street Survivor.


Get Up To $1,000 in Free Stock with Robinhood--the Commission-Free Brokerage!

Open a new account and receive one free stock valued at up to $500! Then, once your account is open, get more free stocks (value from $5 to $500) for each friend, family, person you refer! USE THIS LINK to get started with Robinhood!