Understanding What Penny Stocks Are.
If you are looking for a way to diversify your portfolio and increase your short term profits, penny stocks can make an excellent choice. These low value shares of stock can easily double and triple their value in mere minutes and can do so many times throughout the day. Although, it is important to remember that these pennies can also be a risky investment for the fact the can drop in value just as quickly.
Why are they called pennies?
Basically any stock whose value is under $5 is considered to be a penny stock. They can be found on the major indices as well as off of them. Think of a penny stock as nothing more then pennies on the dollar because when compared to fortune 500 stocks values they are just that.
Why would anyone want to trade penny stocks?
If you had a hundred dollars to invest in the stock market, would you purchase one share of stock at $100 or purchase 100 shares of stock at $1 each? For the quickest return you would get the lower valued shares because they can double or triple their value in a few minutes time.
If they are so profitable, why doesn't everyone invest in them?
In general, much like any type of gambling or investment, the greater the profit potential, the greater the risk. When you purchase penny stocks, you are hoping they double in value quickly, however they can also drop in value just as quickly.
How to pick a good penny stock?
This is not as easy as picking out shares of a big name stock because they are small companies traded outside of the regular exchanges and as such getting useful information about them can be difficult.
If they are so risky, why should I invest in them?
There are many people who invest in pennies each and every single day. Some of them are new to investments while others are veterans to the game. If you choose wisely and win more then you loose, then they are worth the risk.
Care should be taken when investing in penny stocks, but this does not mean you should keep away from them. You have an amazing profit potential in each and every single stock you get, however if care is not taken then you could just as easily loose money too. Before you buy, make every attempt to find out as much as you can about a particular penny stock and the company that issued them before making a purchase as this will help reduce the risks associated with investing in them. - 20759
Why are they called pennies?
Basically any stock whose value is under $5 is considered to be a penny stock. They can be found on the major indices as well as off of them. Think of a penny stock as nothing more then pennies on the dollar because when compared to fortune 500 stocks values they are just that.
Why would anyone want to trade penny stocks?
If you had a hundred dollars to invest in the stock market, would you purchase one share of stock at $100 or purchase 100 shares of stock at $1 each? For the quickest return you would get the lower valued shares because they can double or triple their value in a few minutes time.
If they are so profitable, why doesn't everyone invest in them?
In general, much like any type of gambling or investment, the greater the profit potential, the greater the risk. When you purchase penny stocks, you are hoping they double in value quickly, however they can also drop in value just as quickly.
How to pick a good penny stock?
This is not as easy as picking out shares of a big name stock because they are small companies traded outside of the regular exchanges and as such getting useful information about them can be difficult.
If they are so risky, why should I invest in them?
There are many people who invest in pennies each and every single day. Some of them are new to investments while others are veterans to the game. If you choose wisely and win more then you loose, then they are worth the risk.
Care should be taken when investing in penny stocks, but this does not mean you should keep away from them. You have an amazing profit potential in each and every single stock you get, however if care is not taken then you could just as easily loose money too. Before you buy, make every attempt to find out as much as you can about a particular penny stock and the company that issued them before making a purchase as this will help reduce the risks associated with investing in them. - 20759
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Before you decide to buying penny stocks you will need all the information you can get. Visit the authors website for the answer to the question what are penny stocks?
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