Speculative Stocks

Speculative stocks have the potential to get better returns than the average, but also represent a greater average of risks if the company goes bankrupt or something less extreme occurs.

Speculative stocks are stocks issued by companies that have the potential to strongly increase stock prices. These companies do not own earnings records and are considered as of great risk. These companies have great possibilities of incurring in losses have very low possibilities of experimenting gains therefore have more probabilities of having great gains or losses in their stock prices than any other type of shares. Speculative stocks are more volatile than any other type of stocks. Speculative stocks are often issued by new companies with promising ideas and in a developing stage.

At the end of the ?90s and early 2000, Internet companies and technology and biotechnology companies were considered to be speculative. Many Internet companies didn’t have earnings , but their stock prices were boosted under the expectation of great gains.

Fir example, within a week of having launched its website, the site seller sites-a Million saw prices of their stocks boost from $3 to $38 per share, an increase more than 12 times by a company that still hadn’t had any earnings. The quality requirements to buy speculative stocks due to the high risks is to have a strong stomach, you have to be capable of sleeping well at night under any circumstance. These stocks may provide you with great capital earnings or losses.