The first step in investing in penny stocks is getting the money. Penny stocks are part of a very volatile market. They are usually stocks of small cap companies and thus are more prone to volatility to industry changes and the stock market sentiments.
However, you can also make a great deal of money in a short time with penny stocks compared to other financial instruments such as bonds, mutual funds and even blue chip stocks.
If you are facing a serious financial crisis, are putting three children through college all at the same time, or still have mortgage payments to attend to, it would be better for you not to invest in penny stocks. Likewise for people who are more conservative and not willing to take risks with their money.
It is better to deal with penny stocks when you have enough disposable income laid aside. If not, go for more stable investment opportunities and leave the penny stocks to those who can afford to lose a few dollars without weeping.
Start by educating yourself, especially if this is your first venture. Subscribe to mailing lists and monitor investment returns regularly, to know which companies are doing consistently well and which ones arenât.
There are several well known penny stock newsletter such as Michael Cohen Doubling Stocks that provides penny stock picks every week.
Knowing the in and outs in penny stock investment is essentially the most important thing that you need to learn if you want to make money with penny stocks; that, and learning not to trust email scams and stock trading robots.
If you have the money to spare, test the water with low risk sums. This way you only get to feel a slight pinch if and when you lose the money.
There are also several penny stock trading courses online that provides a basic as well as advanced levels of investing. These provide crucial knowledge for you to trade proficiently.
If you want to know more on how to make money with penny stocks, get yourself acquainted with someone who is an expert in any form of stock trading. Choose someone with good reputation to teach you the ropes so that you can get yourself a stable footing even as you start out.