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4 Penny Stock Sectors to Watch in 2022

1. What makes a good penny stock sector?

2. A sector that has multiple stocks with high liquidity, high volatility, plenty of shares changing hands daily, and a catalyst that spurs growth.

How do you find penny stocks to buy?

Subscribe to specialist tip sheets. The people running these sheets spend their working lives researching possibilities for you. They have teams of experts and know a lot more than you or I about what is happening in the world of penny stocks.

Penny stocks have more growth potential than stocks priced in hundreds of dollars. They are volatile, with big price changes from one day to the next. The volatility means penny stocks are for active traders who have worked out a stop loss and a take profit position for every trade they make. You can make good profits trading cheap stocks as long as you get in and get out at the right times. You can also lose your shirt if you don’t have a calculated strategy and good advice.

Hot Penny Stock Sector 1 – Electric Vehicles

Why should you invest in electric vehicle stocks?

The electric vehicle stocks everyone has heard of like Tesla that have all sky-rocketed in 2021, beating the market rise several times over. The feel-good factor has passed down to lower-priced stocks, which are seeing prices rise month by month.

Electric vehicles will be the next ‘big thing.’ Volkswagen changed one of its car plants over to electric vehicle production in 2020 and is now rolling 300,000 EVs out every year. Diesel is dead. Hybrids have not made the impact people hoped for, batteries are improving, and the number of charging points is going up all the time. EV prices are falling and will fall further as new battery technologies emerge.

Hot Penny Stock Sector 2 – 5G

5G is a certainty, and 5G stocks look likely to beat the market average this year and next.

5G is available now. 5G networks are rolling out in many countries, and when it gets to you the difference it makes will be like going from dial-up internet to broadband.

5G will shake up the world with better connections that are faster and have more bandwidth and make more things possible.

5G stocks are headed for massive growth. Add in the interest from small investors who may prefer to invest in stocks they understand, and the potential is difficult to comprehend.

Hot Penny Stock Sector 3 – Technology

5G is only part of the technology sector. Penny shares in the wider sector are also set for growth.

Companies in this sector often have little competition in the niches they have created for themselves, meaning growth. If companies and profits grow, their share prices will reflect their better prospects.

Look at stocks of companies in biotechnology, sensors, and digital services. These are three areas set to explode. And if you can get in early, while stocks are priced at only a few dollars, you could be set for exponential growth.

This sector is particularly attractive to investors who are getting out of cryptocurrency because of regulatory concerns. They see it as the driving force behind the entire market.

Hot Penny Stock Sector 4 – Healthcare

The U.S. population is aging. The same is true in most European countries, China, and Japan. Older citizens have more health issues and need more care, so growth in this sector is a certainty.

The US administration has put healthcare first and foremost on their political agenda. This will benefit the entire healthcare sector because private investors can understand the impetus the sector has been given and understand the growth the sector will have, especially over the next few years.

The roll-out of Covid-19 vaccines has proven how quickly new vaccines can be developed, lending extra impetus to companies in this sub-sector.

Developing YOUR Penny Stock Strategy

Penny stocks are NOT recommended for buy-and-forget investors. Anyone who wants to buy now and sell in ten years needs to concentrate on blue-chip shares that will follow the stock market trend, rising and beating inflation over the longer term.

Ideally, you should start by researching three or four sectors so you understand the fundamental factors governing each sector.

Diversify for success. You need to spread your risk, so research three or four stocks in your favored sectors. Work out the price you will sell at, whether the share price is going up OR down.

Only then should you buy shares in penny stocks.

You then need to keep up with market sentiment in the companies you have invested in. Check the tip sheets and online finance sites for hints of imminent price movements, and act when the need arises, even if it means taking a loss. Better to lose 10% of your investment than 90% you might lose by hanging on and waiting for things to come right again.

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