The Spiraling Stock Market And Rising Penny Stock Trading Alternatives: Its Worst Week Of The Year

It's been a wild and woolly couple of weeks on the international stock markets. Is the recent slide grinding to a stop or just taking a breather just before tumbling some more? And more to the point, what does it mean to smart penny stock investors?

Wall Street just recently stumbled to its worst week of the year, and global stock markets fell dramatically on concerns about rising interest rates and slowing growth. Immediately after rising practically 9% in the initial four months of the year, the Dow Jones industrial average has fallen about 6% from a six-year high.

Stocks have been ailing due to the fact penny stock investors fear the Fed could be so concentrated on inflation that it ignores signs of an economic slowdown, raises interest rates too high and sends the economy into a recession.

Global stock markets had been sent reeling last week right after golden-tongued Federal Reserve Chairman, Ben Bernanke stunned penny stock investors in saying the Fed will continue raising interest rates to keep inflation in check.

And that choice will have a direct influence on the penny stock market. Higher interest rates hurt penny stock prices because investors think it is going to curb economic advancement and corporate earnings.

But why is inflation heating up? Higher energy costs. Traders and penny stock investors are also concerned that with the hurricane season basically under way, Gulf Coast refineries and oil production sites could be damaged again this summer and fall.

And greater interest rates have the capacity to have an effect on the entire economy. Finance charges on credit cards will rise. So too will rates on mortgage loans and home equity loans, putting additional pressure on home buyers and a softening housing market. Ultimately, it's going to cost a lot more to borrow for expansion.

But does that signal doom-and-gloom for the penny stock market? While the temptation to sell everything might be overwhelming, some see this as an excellent opportunity. "I would not be selling. I would often be purchasing," stated one New York analyst.

So how exactly is this an opportunity for a money raise? It just so happens that several businesses caught in the market's downward spiral are cheaper than they were a few weeks ago.

And as any professional penny stock investor will tell you, acquiring an awesome penny stock when it's been beaten down isn't a bad way to make money and boost business capital over the long haul.

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