Want To Know What Penny Stocks To Buy? Look Inside....
Since the 19th century, penny stocks have been part of the American investment world. This is where the stocks got their names, since modern penny stocks almost never cost a penny. They're usually more like ten cents to five dollars. Now, let's look at the risks of working with penny stocks, then the opportunities they can provide.
Penny stocks are share offerings made to investors by companies that are just too small or new to have a listing with the major stock exchanges. They have significant growth potential, and the initial investment can be quite small, but you run the risk of encountering a pump and dump scheme. Like anything else dealing in the OTC (over the counter) market, the buyer should beware.
Buying penny stocks reasonably means that you need to get the company's business model independently appraised. Just like when you buy shares of any other company that's being publicly traded, you must understand the company business model, what the company does or makes, who their competition is, and what they have to offer.
The thing that makes penny stocks so appealing is that most businesses offering them are actually extremely simple. One typical example of a penny stock company is that of a mining company that profits only when the price of the material it extracts reaches a certain number. There are also a few oil exploration stocks that are valued in this way.
Penny stocks are rated as a high risk vehicle by the Securities and Exchange Commission. Some of the risks involved include incomplete or indirect reporting of finances, fraud, and limited liquidity. People playing using a day trading strategy, sudden demand on penny stocks can create wide ranging volatility, which also makes it hard to short sell them.
The reporting guidelines on penny stocks are a lot less strict than they are for stocks listed on the national exchanges. In fact, some stocks will just delist for a few days. In the investment type known as the Pink Sheets, there's almost no regulatory requirement on penny stocks, no minimum accounting standards or reporting guidelines.
Because there are no generally accepted standards or standardization for penny stocks, they're an area that's extremely vulnerable to fraud and manipulation. People can pose as independent observers, then run up the price of penny stocks. All they have to do then is de list it, leaving buyer with nothing in what's classically called a pump and dump scheme.
Now, that doesn't mean you should be scared off of these stocks entirely. There are lots of real, legitimate start up companies, and they have to get going somewhere. Anyone who can pick a winner will get a handsome reward.
If you have the ability to spot companies that have promise, your payout will be huge. Even if you lose on most of your stock picks, the single winner will be such a big gain that you'll forget about the ones that didn't work. - 23229
Penny stocks are share offerings made to investors by companies that are just too small or new to have a listing with the major stock exchanges. They have significant growth potential, and the initial investment can be quite small, but you run the risk of encountering a pump and dump scheme. Like anything else dealing in the OTC (over the counter) market, the buyer should beware.
Buying penny stocks reasonably means that you need to get the company's business model independently appraised. Just like when you buy shares of any other company that's being publicly traded, you must understand the company business model, what the company does or makes, who their competition is, and what they have to offer.
The thing that makes penny stocks so appealing is that most businesses offering them are actually extremely simple. One typical example of a penny stock company is that of a mining company that profits only when the price of the material it extracts reaches a certain number. There are also a few oil exploration stocks that are valued in this way.
Penny stocks are rated as a high risk vehicle by the Securities and Exchange Commission. Some of the risks involved include incomplete or indirect reporting of finances, fraud, and limited liquidity. People playing using a day trading strategy, sudden demand on penny stocks can create wide ranging volatility, which also makes it hard to short sell them.
The reporting guidelines on penny stocks are a lot less strict than they are for stocks listed on the national exchanges. In fact, some stocks will just delist for a few days. In the investment type known as the Pink Sheets, there's almost no regulatory requirement on penny stocks, no minimum accounting standards or reporting guidelines.
Because there are no generally accepted standards or standardization for penny stocks, they're an area that's extremely vulnerable to fraud and manipulation. People can pose as independent observers, then run up the price of penny stocks. All they have to do then is de list it, leaving buyer with nothing in what's classically called a pump and dump scheme.
Now, that doesn't mean you should be scared off of these stocks entirely. There are lots of real, legitimate start up companies, and they have to get going somewhere. Anyone who can pick a winner will get a handsome reward.
If you have the ability to spot companies that have promise, your payout will be huge. Even if you lose on most of your stock picks, the single winner will be such a big gain that you'll forget about the ones that didn't work. - 23229
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posted by X - Men @ 1:41 AM
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