A Word About Penny Stocks
Penny stocks are shares of stock that sell for less than five dollars, generally. Some professionals will advise against buying penny stocks while others will encourage it. Why the discrepancy? Because penny stocks, while inexpensive and a great way for new investors to break into the stock market, can also carry with them a great deal of risk. Yet, it is this very risk that leads to incredible rewards.
Penny stocks are in abundance and there are certainly a great number of fraudulent companies trying to lure investors in and seize their money. That’s why, when you are thinking about investing in penny stocks, you should take your time and make the best decision possible based on information that you receive about each company.
The last thing you should do is invest in penny stocks from tips you read about in your email’s inbox. Spam is rampant and so are the calls for investing in this penny stock or that penny stock. If you think that a deal that comes through your inbox from an unknown source is too good to be true, it usually is. But if you feel that perhaps this email, or however you heard about this penny stock is legitimate and something you’re interested in looking into further, then it’s incumbent upon you to do a little research before throwing your money into it.
Companies that are fraudulent don’t want you to look into their history or their mission or their market plans. They’ll often toss out a lot of misinformation or financial projections that are beyond the realm of probability, yet quite appealing. Use some common sense when looking into these companies before buying penny stocks. This does not, in any way mean that penny stocks are simply not a good investment.
Penny stocks are a great investment and have made many people throughout history a great deal of money. There have been thousands of people throughout the history of the stock market that have made millions of dollars by simply investing in penny stocks, which is precisely why they are so appealing to so many people.
Penny stocks offer a much greater earnings potential than shares of much larger, more established companies with higher share values. Penny stocks can potentially increase their value over the years by ten-fold, hundred-fold, or even more. The major companies don’t offer that same kind of potential; they are safer bets for building looking to boost their accounts a little over time.
Penny stocks are for those who want to make money on the stock market and are willing to do the research needed before investing.