If you're Pondering of Purchasing Penny Stocks, Here are a couple of Issues You need to Know

Perhaps you are new to the idea of buying stacks and shares, possess a few additional dollars, and are seeking to see how to make your money grow. The cost of shares for companies like Microsoft is too high for the spending budget, so what are you able to invest in?

Penny stocks might be what you want. They are cheap shares, sold at in between $1 and $5. You won閿熸枻鎷穞 discover them listed in the S&P 500 or NASDAQ, so how do you know what companies are selling shares at these prices? If you go to the reference section of your local library you will find a copy of Walker閿熸枻鎷穝 Manual of Penny Stocks. This manual lists 500 businesses which sell share at these low prices. However, you cannot reasonably expect to get rich quick by purchasing these stocks. Some businesses, such as &-Eleven began by being penny stock companies, so you can make cash in this way, but it will take time and you have to do some research and possess a little, or a lot, of luck.

You can buy these shares over the counter, on the OTC market. Prices are quoted in the OTC system for example on the OTC Bulletin Board or in the pink sheets. Before purchasing any penny shares, you need to check that the businesses are registered with the US Securities and Exchange Commission (SEC). One problem with buying these stocks is that the businesses are too small to file their financial reports with the SEC, so sometimes the only information available is false. The fact that there is no reliable information and no minimum listing standards, are deterrents to purchasing this kind of stock.

However, you should do some research into the companies, for example, what exactly do they do? Do they make products or are they a service industry? Are they involved in manufacturing are they an environmentally friendly company? How viable is the product they make? Would you would like to buy it, or do you think it would be popular?

The best thing to do would be to seek advice from a financial advisor before investing money in penny stocks. In the event you don閿熸枻鎷穞 particularly want to do that, the next best advice is to only invest what you can afford to lose. This is true of whatever company you invest in. There is no guarantee that shares will increase in value, and every chance that they will in fact depreciate, so think before you invest.