• the direction of the economy
• the priorities of consumers
• the policies of governments (local / state / nation wide / international)
• peoples’ habits, beliefs, and activities
• the presidential office and the senate

That’s just to name a few. The ways in which the rules can and will change is vast and complex, and while you can sometimes predict trends, most of the shifts will catch us by surprise.

Sometimes, a trend takes decades (think changing from oil to solar). Sometimes it happens in an instant (think 9/11 and the instantaneously resulting military, political, financial, and consumer activity implications).

Now, if you go against a trend with your penny stock investments, it’s like swimming upstream. On the other hand, if you spot a trend early enough and react to it, you’re setting yourself up to benefit.

You wouldn’t want to buy into a fur coat company when it became politically incorrect to wear fur. The company’s customers, and therefore their revenues, would be dwindling down, and soon the penny stock shares may be as dead as the minks they skin. There would also be implications on all aspects of the fur industry, from the hunters all the way down to the advertising companies that had some furriers as big clients.

On the other hand, perhaps a drop in purchases of fur started resulting in an increase in purchases of leather coats, or expensive jewelry, or fine cars. People often bought fur coats because they were very expensive, and thus served as status symbols. Those same people, when they gave up on fur, would look to other forms of status symbols. Perhaps its a type of car, perhaps its a type of jewelry, or maybe it’s even a different kind of coat. If you can predict the result of the shifting trend, then there will usually be opportunities for you as a penny stock investor.

The are four primary trends which can impact your investment analysis, and the types of penny stock companies you may be investing in. They are:

• social
• political
• industrial
• consumer

In addition to these, there are many secondary trends which could be important, and should be considered by penny stock traders. Some of these include, but are not limited to:

• military (focus, spending, deployment regions)
• investor activity
• religious beliefs
• medical (treatments)
• medical (patient knowledge)
• technology adoption

A few trends of note in recent history include increased use of seatbelts, improving racial tolerance, the invention and widespread use of the internet, technology to combat crime (for example Lowjack to react to car theft), and so on. There are literally thousands of trends taking shape or underway right now, all around you. If you pay special attention to look for such shifts in society, you may spot a trend or two, and from that may position yourself to profit.

About the Author:

Get to know Peter Leeds, and read some recent articles by Peter Leeds.