Thursday, October 18, 2012

How Can I Invest in Penny Stocks

Penny stocks are stocks that have low value i.e. less than $5. Investment in penny stocks in considered to be very risky but it's not an impossible errand. A spontaneous decision can make the art of investment easy.
According to many investors, investing in penny stocks is an art that do not come in few nights. Before investing in micro cap, it's very important to have knowledge about the risk element associated with penny shares. If you are not a business professional, still you have ways to get to know about penny shares.
If you have some money in hand and you want to earn on it, then penny stock is what you are looking for. Best thing about penny shares is that you don't need to have huge capital to invest. A reasonable amount is enough to invest and earn on it. But investment shouldn't be done blindly. You need to be very speculative before getting your hard earned money into penny stocks, as they have the capacity to shoot up in one moment and getting to ground in other.
Before investing in micro cap, you should do proper research. You can start it from consulting brokerage houses as you will need a broker for selling and buying penny shares. Keep in mind to go to a reliable good reputed broker.
You must have complete knowledge about the company in which you are investing to avoid regret in future. Beside that it's very important to analyze the financial of the company as well. You can check for financials at Google finance and Yahoo Finance. Keep in mind that micro cap are not listed with NYSE or Nasdaq. There are specific different exchanges for penny shares like Pink Sheets and OTCBB. Unfortunately these exchanges do not bind there companies to strict rules and regulations. That result in limited and obsolete financials of the company. This is one of the drawbacks associated with penny stocks.
When you have made up your mind for investment in penny shares and you have started to research for them, another issue associated with it how to pick the right stock for investment? How to determine that which stock will go up more probably and have low risk of loss associated? To get to know the answers of all these questions, the best option is to subscribe to a good newsletter. Newsletters contain all the required information that is provided to you by the experts having experience of decades in the industry.
When it comes to investing in micro cap stocks, an authentic pennystock newsletter service can do wonders for investors. The secret is to know the when to buy and when to sell penny stocks.