Penny stocks are stocks that are traded over the counter (not as part of the major exchanges like NASDAQ). They get their name because they are incredibly cheap, and trade for $5 or less apiece. They are very high risk, because the information about them is easily manipulated and hardly ever accurate or reliable. Many investors choose to put their money into penny stocks because of they are very cheap, and they are often advertised as having the potential for rapid and high growth. However, investors should be wary, as penny stocks also have the potential for devastating losses, because they often have low liquidity (they are hard to sell), they don’t have reliable financial reporting, and there is a great deal of fraud surrounding the market. Accordingly, the SEC warns investors to be vigilant and wise when investing in penny stocks.
Many bankers decide to put their money into penny stocks due to they are extremely cheap, and they are continually publicized as having the capacity for fast and high enlargement.
Nevertheless backers should watch out, as penny stocks also have the ability for devastating losses, because they frequently have low liquidity ( they are troublesome to sell ), they don’t have loyal financial reporting, and there is a fair deal of crime surrounding the market. Accordingly, the SEC warns bankers to be vigilant and smart when making an investment in penny stocks.
That way, if you lose, it’s not so devastating to your life savings. Once you have made a decision to invest, you must follow some straightforward steps : Research penny stocks and penny stock brokers. You need to use both offline and online sources to be certain you get the maximum correct and complete info. Once you have done your researches, decide who you would like to purchase your penny stocks from primarily based on your best discounts.
Once you’ve done your research, decide who you want to buy your penny stocks from based on your best deductions. Only buy penny stocks from an experienced and proven stock brokerage firm. There are a lot of people who claim to be able to get you rich quick, but often they only have their own interests at heart. It is best to play it safe when choosing who to purchase from. Lastly, know the Securities and Exchange Commission (SEC) rules.
You need to be approved for the transaction and given a written agreement by the firm you are purchasing stock from. The firm must also give you a paper that goes over the risks involved in investing in penny stocks. Your broker is required to provide the current market quote for the penny stock and the pay the firm and its broker will get for the trade.
Only buy penny stocks from a seasoned and proved stock agent. There are a giant quantity of people who claim to be able to get you rich fast, but constantly they only have their own interests at heart. It’s a smart idea to play it conservatively when picking who to get from. Finally, know the SEC Commission ( SEC ) rules. You need to be approved for the exchange and given a contract on paper by the firm you are purchasing stock from.
Remember to play it safe and do your homework! Good luck!
Theodore Lightnites is an author with special knowledge about government bailout plan He can also help you be a better investor.