Making a Start in Penny Stock Investing
 Making a Start in Penny Stock Investing

More and more people have entered the challenging, though risky, world of pink or penny stock investment over the past two decades. The primary attraction of penny stocks is that they are so cheap that they cost less than $ 5 per share. Old companies in financial distress, however, usually offer pink stocks in order to make a recovery or new businesses that need additional capital for their operations and/or expansion. These two and more reasons make penny stocks risky.


However, if you follow some very important tips, penny or pink stock investment can be a profitable endeavor ...


First, make it a point to do extensive penny stock investment research before you spread any money. On the basis of trading these kinds of stocks, you might want to check out stock market resources on the Internet. If you have friends who are already investing in penny stocks, consider interviewing them, so you'll get a better idea of how the trading system works and how you can pick valuable stocks. You also need to look for a brokerage company specializing in penny stocks during this stage, which will help you during the actual trading process.But make sure the broker is licensed and trading certified on the different exchanges. Before acquiring their services, you might want to consider doing a thorough background search so that scammers won't trick you.


Because much of the purchase and sale of penny stocks takes place on the World Wide Web, it is advisable to sign up with such highly recommended firms as Etrade, Scottrade, and Charles Schwab for an online stock trading account. These sites have a complete list of stocks for sale, and they even have newsletters that provide stock information showing great gain potential.


Once you have a list of the pink stocks you want to invest in, check out the companies that offer these stocks. Evaluate their performance, records of management, financial status, and (or not) the success of any products they support. Investment in a company that has no management or financial issues is worthwhile, as this means greater returns for you.



Let's be quite frank here. The main reason people invest in penny stocks is because they have so much potential to make BIG movements-and big movements can mean big money if you make the right time. The problem is often that you don't find out about this movement until it's too late, though. I'm going to tell you in this article about a method you can use to get into earlier penny stocks on the verge of making a big move.


First of all, I would like to issue a few warnings. You should never buy a penny stock trading so low that the spread is high. The spread for those who don't know is the difference in the price a person wants to sell a stock for as opposed to the price for which it is actually sold-and vice versa. The reason for this is if you buy a penny stock with extremely low volume (nearly all penny stocks have relatively low volume, but I'm talking about REALLY low volume), you might get stuck not being able to sell that stock if the price for some reason should head south. You might lose all or a substantial portion of your investment, in other words.


The second warning I want to issue is to be careful about any stock trading on the pink sheets, particularly if that stock trading is less than $ 0.50. Trading on the OTCBB is one thing for a penny stock, but trading on the pink sheets is far more risky.


Okay, now that we have those warnings out of the way, here's the secret to get in on a penny stock BEFORE it's going to make a big move:


Buy penny stock picks from someone who has a proven track record of picking very profitable ones BEFORE they're skyrocketing. Please note: I'm not talking about "free picks" that will cost you almost always. I am talking about services offering PREMIUM picks for a nominal fee (not pumping and dumping scams).



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