Buying penny stocks can produce high profits quickly from relatively small investments, but this kind of investing also carries quite a bit of risk. This risk can be reduced through careful evaluation of stocks, but the evaluation process is difficult and can require a lot of time.
There is a new picking service that has been created that analyzes penny stocks thorough in-depth mathematical analysis and by doing so dramatically decreases the risks and increases the profits from buying penny stocks, while greatly simplifying the work of choosing what stocks to buy and when.
Penny stock investing has big advantages when it comes to large, rapid returns on investment, and the fact that penny stocks are priced low enough for even very small investors to buy stocks and have the opportunity for a diversified portfolio. With penny stocks, a change in the price of the stock of just a few cents can mean a large change in the value of the stock on a percentage basis, leading to a large potential return on investment, especially when compared to the usual return on investments with higher valued stocks.
However, penny stocks can just as quickly go down in price – losing an investor a bundle. Caution is well advised.
Penny stock investing can also be risky because of shady or outright fraudulent practices of some individuals involved in marketing and selling penny stocks. It is often very hard to get reliable information to really evaluate penny stocks, as companies that issue these stocks are not legally required to file financial reports with the Securities and Exchange Commission.
Various unscrupulous tactics may be used to lure unsuspecting investors into buying penny stocks as a ploy to drive up the stock price and then insiders may quickly sell of their stock at a high price. The sell-off drops the stock value sharply and the investors take a big loss. In investing, it is typical that investments with the highest potential returns will also have the highest risk, but in penny stock investing, the high rate of fraud increases the risk well beyond just what is produced by the natural tendencies of the market.
To overcome the risks, buying penny stocks has traditionally required a large investment of time to research stocks to avoid the scams and predict a relatively good rate of return. A careful penny stock investor could spend quite a bit of time evaluating a single stock. This effort would hopefully pay off in the long-run, but the time required in doing this often made penny stock investing out of the question for part time investors.
This is one of the many reasons that many penny stock traders are using this personalised stock picking service. The stock picks with buy and sell instructions are emailed to you for your consideration. Members of this picking service are enthusiastic about the returns they are getting and if you would like to know more then visit penny stock picking service.