It's easy to understand why some people gravitate toward penny stocks. The thinking goes that companies with microscopic valuations and cheap shares have the potential to post explosive gains in short periods of time. Sometimes, a stock could go up simply from a bit of news coverage, and sometimes, penny stocks jump for seemingly no reason at all.
The reality of this risky investing strategy is much different, however, and the vast majority of companies in the category will wind up leaving investors burned. If you're looking for explosive gains, focusing on small-cap tech stocks that can benefit from major trends is a much better bet. Here's why Glu Mobile (NASDAQ: GLUU), Impinj (NASDAQ: PI), and Himax Technologies (NASDAQ: HIMX) are great stocks for risk-tolerant investors seeking market-crushing gains.
Image source: Getty Images.