If you heard anything about penny stocks, it is probably that they are a bad investment or scam.
There has been a lot of bad hype concerning penny stocks and the bad rap has made many investors shy away from using penny stocks.
But are penny stocks dangerous to investors?
Penny stocks have a bad reputation for various reasons.
Nearly everyone has been exposed to scam mails, which claim to offer cheap penny stocks in exchange for huge returns.
In truth, this is a scam, and will only cause you to lose your money.
This is one of the reasons that many try not to invest in penny stocks.
But penny stocks are said to be a high-risk investment, which turns many people away from investing as well.
There are some advantages to penny stocks, however, and they can bring in a good return.
In fact, penny stocks can be incredibly lucrative, and many investors choose to take the risk on penny stocks in hopes of getting huge profits in the end.
With penny stocks, investors often have to act quickly, as penny stocks infrequently trade.
This infrequent trading is one of the reasons that penny stocks are regarded as high-risk investments.
It is hard to sell stock that does not trade often.
In US, the term penny stocks are often applied to those publicly-traded shares that do not go through the major stock exchanges like NYSE, NASDAQ, or AMEX, for instance.
Trading in an unsure market makes many investors leery of trying penny stocks out for themselves.
But for those who know how to finesse their stocks, penny stocks can bring in a good return, and this is what makes many investors bold enough to try them out.
Are they risky?
Yes.
Are they unsafe?
Not really.
Unless you invest in penny stocks that you find advertises in your e-mail.
Do not trust these spam messages.
Rather find your own penny stocks to invest in.
There are plenty of good penny stocks out there to invest in.
It is just a matter of finding them.
Check business journals and talk to your stock broker if you have one.
These are both good ways to find out about new penny stocks.
Penny stocks are often cheaply bought, and in the best-case scenario are then sold for great profit.
It is this hope of a large return that keeps many investors coming back for more, buying more penny stocks, and hoping.
When such a prize awaits, many are willing to take those high risks.
Only you can decide if investing in penny stocks is right for you.
Look into the stocks you want to buy before investing your hard-earned money.
Created by James Connelly, Penny Stock Prophet is an online learning program in which the creator identifies penny stocks that he claims should increase their value.
