If, you are thinking to join in penny stock investments and want
to know everything about it in just a few minutes of reading. Well, we can definitely
try although it must be emphasized that like other investment types, this
investment requires continuing education in more ways than one.
If the issuing company only has US$50 to $300 million
capitalization, it is considered a penny stock company. (Less than US$50
million dollars and it is considered a nano-stock) If the price per share is
less than $5, then it is also a investment.
If it trades in the Pink Sheets or at the OTCBB, then it is penny stocks. The
bottom line is that if it does not publicly trade in the bog stock markets like
the NYSE Euronext, NASDAQ and AMEX, then it will be considered as penny stock
investments. You will notice that these shares can fall in just one or all of
these definitions but their nature will remain basically unchanged.
You should also take note that shares of these investment companies
are the riskiest investments available in the stock markets for many reasons.
For one thing, there is very little regulation simply because the companies
registered therein are not required to file audited financial reports with the
Securities and Exchange Commission. Keep in mind that financial statement
evaluation is an important part of investment strategy.
For another thing, there is a very low level of liquidity.
This makes for a highly volatile market where it can be difficult to sell stocks
in the future and where stock manipulation can easily happen. Add in
fly-by-night companies and the risks just went sky-high.
Fortunately, there are ways with which you can still make
decent profits from penny stock investments. The important thing is that you
approach penny shares just like mainstream stocks although with greater
levels of caution - tips on buying low and selling high, doing your research,
and sticking to your entry and exit plan still applies.
Add in tips on avoiding biased recommendations and offshore
brokers and you should be just fine. For example, you may be receiving spam
mails in your inbox and mailbox, all of them from self-proclaimed experts with
suggestions to buy into certain penny shares. Take them with a grain of salt, so
to speak. You must instead use your own research, common sense and gut
instinct. This also goes for offshore brokers in a boiler room operation. These
dishonest brokers will do the pump and dump routine on your money if you are
not too careful.
The bottom line is that investment can be good investments,
too, when compared with Blue Chip stocks, mutual finds and index funds, to name
a few options. However, you must learn, accept and overcome the high risks
associated with microcap stocks lest you wake up one day with nothing but
pennies to your name, literally. Indeed, greed without knowledge is a dangerous
Take a simple visit to-: www.rockportequityllc.com
for getting lots of useful info about share market investment. Best of luck for
a bright future….
Should I Get Invested On Penny Stocks?