Investing in small company shares - also called ‘Penny Shares’
Our future prosperity depends upon the success of small companies
No one in government and other positions of power and influence in the UK would deny that small companies have been the foundation of our rich and highly developed economy. Equally, no one will deny that small companies will continue to be the lifeblood of our economy in the years to come.
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Do not underestimate the importance of small companies to the UK economy
Small companies (also called Small and Medium Enterprises - SME’s) employ about 13.5 million people in the UK – some 28% of the total adult population. They employ early 60% of all those employed in private sector enterprises and they account for 51.5% of private sector turnover which equates to an estimated sum of £1,444 billion.
Small companies welcome private investors
Clearly small companies play an extremely important role in our future prosperity but to be successful they need sufficient levels of investment capital. Many small companies are delighted to receive investment from private investors because such investors tend to be more interested in the company and its’ products to the extent that they become strong advocates of the business and tend to help in any way they can to make it a success.
Private investors must understand what they are getting into
Before investing in a small company (or 'penny stock'), private retail investors must be aware of the very high levels of risk from their investment. Many small companies fail and the chances of investors losing all or some of their investment are very high. So, private investors are better not investing money in small companies that they cannot afford to lose. On the other hand when small companies are highly successful the rewards (in terms of capital growth) for investors can be extremely high.
Producing information investors must have before they decide to invest
HB Markets is extremely fortunate in having a highly experienced and skilled team of researchers and analysts who are constantly scanning the whole SME sector assessing company performances and writing research notes and reports. These research notes and reports are freely available to registered members on our website. Click here to register now!
However, the research team are not constantly searching for and analysing the performance of small companies for nothing – indeed, they are looking for companies with the potential to bring our clients significant capital growth.
Every day of the working week the research team produce a commentary on recently announced company results or important company news. This process of finding potential investment opportunities requires HB Markets to search for, acquire and analyse huge volumes of information which is subsequently distilled to give would be investors a clear picture of the company and its prospects.
Additional client benefits
During the on-going, relentless search for companies with excellent prospects for growth HB Markets frequently like companies so much that we decide to buy shares ourselves. Because we buy these shares in such large quantities we are often able to secure a preferential discount to the offer price for our clients who decide to invest in such companies. However, whatever the circumstances we will always offer shares in such companies at a price less than the prevailing market price.
If you would like to know more about investing in Penny Shares, please click here if you wish to:
