THOUGHT FOR THURSDAY 24TH JANUARY 2008
From top share author MALCOLM STACEY
Hello Crazy Folk,
With all the turmoil in the market (which is how some journalists like to describe big falls) we sometimes forget the penny shares.
And no wonder. Because as the giants tumble en masse the cheapies can often be quite unaffected. And in some cases, lowly penny shares can creep up, as the big blueys give up the ghost. They did this week.
You only have to look at some of Tom Winnifrith's selections to see that. As the market falls around them, they are doing well. For the most part.
Even on those horrible days when hardly any blue chip is blue, so to speak, there are a bevy of cheaper shares which have put on 7-10 % and beyond.
This is interesting and it fuels my personal policy that it's better to have half my money in blue chips and the rest in cheaper stocks, mainly penny shares.
There are some folk who disagree - and "for safety's sake" put all their assets into Footsie shares. Well, all I can say is that some of my biggest all-time losses have been blue chips. Like Energis, British Energy and Northern Rock.
They weren't safe at all, were they? And yet some of my pennies have gone up 1000% - and even much more than that. Of course, penny shares are a bigger risk, but only if you don't spread the load. Have a few quid in a lot of penny shares, and according to the law of averages, you will probably have a very nice win one day - and in between some fairly hefty profits.
Yes, some penny shares may fold altogether, but even among penny shares, total disaster is still quite rare. So that's my view - though it may not be right. Rocking on!
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