Penny Stocks can be defined as securities of small companies that are trading for less than one dollar. Some authorities and brokerage houses refer to any issue below five dollars as being in this category.Regardless of where you draw the line, penny stocks have been the subject of many bad jokes as well as a treasured item for those who know how to handle them.
The good news is that Penny Stocks appeal to a wide range of investors from newbies to established stock pickers to seasoned pros. One can easily "hit a home run" if your homework and due diligence point you in the right direction. Investment gains in the hundreds if not thousands of percents is very common place. All one has to do is to look beyond any hype and check out for themselves, any news or claims being made about a company, before putting their hard earned cash at risk.
The bad news is that Penny Stocks can be like any vice that man has fallen victim to throughout history. Hot tips, unrealistic hype, and rumors from well meaning individuals have all led to some very scary losses for those investors that did not take the prerequisite cautions when investing in the stock market. As with many things in life, "an ounce of prevention is worth a pound of cure". So it is true with this type of investing as well. Additionally, these securities tend to be "thinly traded" making them illiquid at times. This can be a problem if you decide to sell and find that you cannot sell or at least not when you want to.
The ugly news is that Penny Stocks have been the subject of many "pump and dump" schemes. For those not familiar with this phenomenon, an organization buys up many shares of a penny stock firm and then sends out information....usually miss-information... about how great the company is and that it is the latest greatest whatever and you would be a fool not to pick up some shares yourself. This is the pump phase as in pumping up the value of the shares due to the increased buying frenzy. Then at some point when the original organizers are content with their ill gotten over valued shares, they sell them off which is the dump phase of the scheme. They will have reaped the profits while the unsuspecting victims are left holding worthless shares of stock. This whole concept was immortalized in the 2000 Hollywood film "Boiler Room".
So right about now you might be thinking that you would like to invest in Penny Stocks but you want to limit your risk and maximize your reward. What can you do? For starters you must be absolutely certain that whatever portion of your investing is devoted to penny stocks, you must be comfortable with the knowledge that the securities could become worthless! In other words, you cannot invest the rent on them. The next thing you should know is that only a very small percentage of your entire investment strategy should be placed in the Penny Stock arena. Somewhere between 5% and 10% would be the maximum amount any prudent investor should wage here. Finally, you need to have a constant source of realistic information being made available to you. I have found that the news put out by [http://www.premiumpennypicks.info] has been straightforward, enlightening and rewarding all rolled into one. I encourage you to have a look for yourself.
To Your Investing Success
Sincerely
Chris
The good news is that Penny Stocks appeal to a wide range of investors from newbies to established stock pickers to seasoned pros. One can easily "hit a home run" if your homework and due diligence point you in the right direction. Investment gains in the hundreds if not thousands of percents is very common place. All one has to do is to look beyond any hype and check out for themselves, any news or claims being made about a company, before putting their hard earned cash at risk.
The bad news is that Penny Stocks can be like any vice that man has fallen victim to throughout history. Hot tips, unrealistic hype, and rumors from well meaning individuals have all led to some very scary losses for those investors that did not take the prerequisite cautions when investing in the stock market. As with many things in life, "an ounce of prevention is worth a pound of cure". So it is true with this type of investing as well. Additionally, these securities tend to be "thinly traded" making them illiquid at times. This can be a problem if you decide to sell and find that you cannot sell or at least not when you want to.
The ugly news is that Penny Stocks have been the subject of many "pump and dump" schemes. For those not familiar with this phenomenon, an organization buys up many shares of a penny stock firm and then sends out information....usually miss-information... about how great the company is and that it is the latest greatest whatever and you would be a fool not to pick up some shares yourself. This is the pump phase as in pumping up the value of the shares due to the increased buying frenzy. Then at some point when the original organizers are content with their ill gotten over valued shares, they sell them off which is the dump phase of the scheme. They will have reaped the profits while the unsuspecting victims are left holding worthless shares of stock. This whole concept was immortalized in the 2000 Hollywood film "Boiler Room".
So right about now you might be thinking that you would like to invest in Penny Stocks but you want to limit your risk and maximize your reward. What can you do? For starters you must be absolutely certain that whatever portion of your investing is devoted to penny stocks, you must be comfortable with the knowledge that the securities could become worthless! In other words, you cannot invest the rent on them. The next thing you should know is that only a very small percentage of your entire investment strategy should be placed in the Penny Stock arena. Somewhere between 5% and 10% would be the maximum amount any prudent investor should wage here. Finally, you need to have a constant source of realistic information being made available to you. I have found that the news put out by [http://www.premiumpennypicks.info] has been straightforward, enlightening and rewarding all rolled into one. I encourage you to have a look for yourself.
To Your Investing Success
Sincerely
Chris