Who doesn't (except billionaire's, of coure)?
I've been thinking about stragegies to take a $25K initial investment and try to turn it into a million bucks. I don't mean finding some pink sheet number and dropping the whole wad on it either. On the other hand, penny stocks are probably your best bet. Currently, I'm doing something along the line of:
25% in stocks and funds in the value sector medium to large companies.
15% in bond funds (pretty stable if not exciting)
30% in medium to large growth stocks/funds
The last 20% is money I'm willing to put at higher risk. Income from the first 80% can be used to supplement the risk fund.
I look for emerging companies that have new technology that can have an impact. Energy is hot now and will be for some time, but I don't really care what sector it is in. It has to be something tangible or able to be quickly turned into something tangible (inventory and the ability to produce more). I stay away from services, and software. No moat there. I only find about four or five of these stocks per year. High risk and high reward. I don't want anything to do with penny stocks for long established firms. If they don't have their act together yet they probably won't anytime soon. So far I'm averaging about a 30% return with most coming from the high risk stocks. Patience and conviction in your choice is key. I'm only about 8 months into this strategy. Don't know if it work or not, but so far so good.
Please note that this is not the sum total of my savings or investments. The bulk of it is either in 401K or other investments using a more traditional methodology.
I'm not a day trader by any means, but I do monitor this quite closely.
Comments from the pros?