12 Best Rising Penny Stocks To Buy

Fahad Saleem
8 min read

In This Article:

In this article, we will take a detailed look at the 12 Best Rising Penny Stocks To Buy. For a quick overview of such stocks, read our article 5 Best Rising Penny Stocks To Buy.

Stocks are roaring after Nvidia posted yet another strong quarter, crushing AI naysayers who were calling the stock overvalued and the AI wave a hype. More and more analysts are now seeing a soft landing for the economy, with some top economists saying the US would be able to avoid recession and achieve the 2% inflation target without high unemployment. This bodes well for smaller companies like penny, micro-cap and nano-cap stocks that usually get punished when markets are down and everyone is investing in established companies.

Why Should You Buy Stocks Amid Soft Landing Scenario in 2024

Buying more stocks has been the recommendation of many analysts and experts for a soft landing scenario. In November 2023, a Wall Street Journal report talked about how economists were growing confident about the economy's ability to dodge recession. The report quoted Alessio de Longis, senior portfolio manager at Invesco, who said at the time that the soft landing possibility was "playing out" and we were in a "mini Goldilocks scenario."

The WSJ report also said small-cap companies, which are more sensitive to higher borrowing rates, were trailing the S&P 500 in 2023 by the widest margin since 1998. But that was about to change according to some experts. The report cited BMO Wealth Management chief investment officer Yung-Yu Ma, who said small-cap stocks were expected to rally in 2024 amid expectations of lower rates and a stable economy.

If you find some experts and economists rejoicing the market's rally in 2024 and soft landing, you would also find many still expecting recession and hard landing. What are the options for an average investor in this case? The best advice comes from top investing gurus who've seen it all. Legendary value investor Seth Klarman in 1999 wrote a letter to investors discussing the reasons behind his fund's underperformance. What Klarman said at the time explains the essence of long-term investing involving patience and discipline:

"Occasionally we are asked whether it would make sense to modify our investment strategy to perform better in today's financial climate. Our answer, as you might guess, is: No! It would be easy for us to capitulate to the runaway bull market in growth and technology stocks. And foolhardy. And irresponsible. And unconscionable. It is always easiest to run with the herd; at times, it can take a deep reservoir of courage and conviction to stand apart from it. Yet distancing yourself from the crowd is an essential component of long-term investment success. Baupost has employed a value approach to investing because it is, above all, risk averse, and focused on preserving capital over the long run. This approach demands both discipline and patience. Discipline is required to buy only bargains and sell fully-priced holdings, never becoming swept up in the enthusiasm of the herd. Patience is required to wait for just the right opportunities, avoiding the pressure to make investments that don't meet the most stringent criteria of quality and under- valuation, and then to hold on, allowing an investment sufficient time to come to fruition. The stalwart performers of today's stock market trade at higher valuations than any of the bull market favorites of yesteryear. The major stock market indices are, by virtually all measures, extremely overvalued. Never before have companies that have strung together a few years (or quarters) of earnings (or sales) growth been valued at such high multiples. And never before has the gap between the in-favor few and the out-of-favor many been so great. A few hundred in-favor growth stocks lift the market averages, while thousands of out-of-favor companies trade at bear market valuations. The disparity between the market favorites and everything else has never been greater."

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