Are Penny Stocks Key to the Investment Future?

It's well known that small businesses produce the bulk of new jobs in America, year in and year out, but that thesis may be more prescient in a "muddle through" or stagnant economy, such as the one that has prevailed the past three to five years. While the general stock market has seen significant gains since the '08-09 meltdown, smaller companies, despite lack of adequate access to capital for many, have been flourishing.

Most big, corporate stock advisors or brokers will tell you that small caps are the way to go if you're looking for growth, but only nimble advisors outside the mainstream with great research, like Timothy Sykes, can offer you the next top penny stock.

Penny stocks come in all manner of varieties, from small restaurant chain concepts to high-tech startups to the popular "green" companies which don't generally get the press or the credit for their risk-taking mindset. Finding these companies requires a lot of time and research, something the average home investor doesn't have and that's the exact reason why scouring the web for information on particular companies may not be the best approach.

In addition to some of these companies having little time nor money to spend on press releases and public relations, by the time big breakthroughs occur, it's often too late, the stock having already made a significant move.

That is why it's useful to follow Sykes and maybe a few other experts in the penny stock universe, as gains on some of these top picks have produced extraordinary gains in a relatively short period of time.

Small business is the driver of growth in America, and penny stocks are the instrument by which the average investor can keep pace or exceed the ultra-insiders of Wall Street. Think about it. Wouldn't it be better to be in on the ground floor of a little-known company with a load of upside, than a run-of-the-mill S&P 500 company whose every move is telegraphed over CNBC and more than likely previously dished out to the big brokerages? Why pin one's hopes on the big Wall Street-connected companies, many of which are responsible for the high unemployment and tight banking policies that have slowed US productivity to a crawl, when you can invest in some of the most exciting, albeit risky, ventures on the planet.

If you're looking for an edge and don't mind high risk, Timothy Sykes and his website are probably worth the time to investigate.

Investment Ideas: Gold, Silver or Penny Stocks?

If you're young and brash, or even if you're old and still have some risk appetite, you may be looking around for new investment ideas.

Trouble is, you probably won't find any on CNBC, Fox Business or any of the traditional media outlets. You'll have to dig a little deeper, maybe even start researching financial blogs, but there are literally thousands of them. Finding the right kind of investing advice for your particular risk level can be as daunting a task as picking a particular stock out of thousands of those listed on the major exchanges.

For some, whose primary goal is to protect wealth, the answer is simple. Gold, gold and more gold, but make sure it's physical and you can keep it in your own possession. Playing around with the SPDR Gold Trust EFT (GLD) may bring you profits, but in the end you have paper, not gold. You want physical, and it's as easy to get as a trip to a local coin or precious metals dealer or from various international dealers such as AMPEX or KITCO, who generally can suit the needs whether you're spending $10,000 or $10 million.

Those same coin shops and dealers usually also do a brisk business in silver, which is a little more speculative, but carries the same kind of wealth protection as gold, but at a fraction of the cost (the current gold:silver ratio is right around 40:1, though it's traditionally been closer to 16:1).

Another place to buy silver and gold is - of all places - eBay, where there are hundreds, if not thousands of auctions for gold and silver every day. The prices are fair, usually around spot, often less, and the action is fast-paced and addictive.

For those who are tired of the mainstream stocks, many of which have been gyrating and grinding higher and lower without any regard to fundamentals, a more rigorous test of one's due diligence comes in the form of penny stocks, which are just what they sound like, small companies selling shares in a smaller, and consequently, less liquid, market, known in the trade as the "pink sheets" or simply, "the pinks."

Penny stocks are not for conservative investors; they carry a high level of risk. Many of these companies aren't even known to the general investing public and most of them are unprofitable or just barely turning a small profit. The key is to know which ones are actually going somewhere, have good management and are on their way to becoming the next Microsoft or Google. Most companies start small and penny stocks offer investors to get in on the ground floor, before their idea, application, service or product goes viral or mainstream.

Many of these companies are bought out by larger firms, resulting in hefty profits for shareholders, but finding the good ones takes time and research, to say nothing of an iron stomach.

There are dozens of sites offering penny stock picks but clicking the preceding link will take you to one that has a proven track record, offers quality content and does great research on companies you may have never heard of but could be regional powerhouses, national or global leaders years from now.

So, there you have it: three investments for three different levels of risk appetite. Low: Gold; Medium: Silver; High: Penny Stocks. And you don't have to watch a minute of CNBC for any of them.

Small Investment, High Risk, Big Potential

Searching around for alternative investments to the usual fare of stocks and mutual funds, some investors may find their way to penny stocks, which are commonly shares of companies in the early stages of development, mostly unprofitable, but enticing for both initial cost and potential upside.

Anybody can purchase penny stocks, but finding winners is a tough act, so it pays to do diligent research and possibly get some advice, and there are plenty of sources on the internet.

Here are three that may turn a few dollars into a gold mine.

Stockreads.com offers updated top penny stock picks sent out by newsletters, and offer tools to browse the stock picks they select. The site is updated frequently and provides straightforward research without a sales pitch.

Timothy Sykes, an acclaimed penny stock investor who has been seen on CNBC, ABC, CNN and in the NY Times has a fabulous site offering free and premium content, highlighting the best penny stocks to his readers and followers.

The Penny Stocks Guide is a comprehensive and impartial resource for investors interested in penny stocks. The website provides basic principles of penny stock investing and advice on how to do it intelligently and safely.

Many online brokers allow investors to engage in the penny stock markets or the "pink sheets" as they are known. A lot of well-known companies began as penny stocks, with few investors and limited capital, until hitting the big time with an IPO. Gains of 500-1000% are not unusual for big winners, though many of these penny stock companies never make it to that stage.

All said, penny stocks are not for everyone, but if you have some money you can use with discretion and not worry about losing, the penny stock market could be a reasonable investment of time and money.