Penny Stock Picks

Penny Stock Selections

If you know about penny stocks and want to invest, you will certainly like to know how to pick them.

Through simple Google search, you will find a list of many stocks being traded online.

They can be future versions and start-ups of Apple, Amazon, Microsoft or Wal-Mart.

But in order to profit, the investor needs to do his due diligence before picking the right penny stock.

Truth being said, it can be a challenge to get reliable information on penny stocks, as information is everywhere but may or may not be accurate.

These will affect the investors psychologically before they even took the first step especially for beginners.

These companies are therefore not regulated by SEC or Securities and Exchange Commission, as compared to those listed at NASDAQ or NYSE.

Moreover, their history is not available.

Some of them may no longer do well and even be on the brink of bankruptcy while others just started out and need time to grow.

A new investor certainly needs to research about them through reading from reliable sources instead of just relying on what company management and mainstream media says about them.

That is the first hurdle.

The second is limited liquidity.

Sometimes it is difficult to sell the stock, as you may not find buyer.

Having very low liquidity, you may have to sell the stock at hefty discount causing you a heavy loss.

Sometimes the brokers manipulate the penny stocks in various ways and may cause you sever losses.

Unless you do not understand the basics of stock market avoid investing large amount in penny stocks.

Chances Of Fraud

As the companies offering penny stocks are not scrutinized or regulated by government agencies or The Securities and Exchange Commission (SEC), penny stocks are more prone to fraud.

Most of the times, companies spread rumours about their financial performance and mislead the investors.

With the help of media such as newspapers, press releases, radio or email and hype about the penny stocks offered by them.

You may get several emails from their agents as well.

These companies also pay for some financial consult for recommending their penny stocks to the investors.

Picking The Right Penny Stock

Although the market of penny stock is highly risky, there are good companies also at OTCBB and pink sheets.

The actual understanding is needed to identify the good penny stock and a lot of research is needed before putting money in penny stocks.

Picking of a right penny stock is the key factors for earning and you should ensure yourself that you are picking the right penny stock.

Sometimes a little research can help you picking a right penny stock.

Review Of Penny Stock Prophets

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.

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