Everything you need to know before you start buying penny stocks

Many investments may seem out of reach. Unfortunately, land is priced out of the range of small investors many times, blue chip stocks sell for hundreds of dollars, and you don't have any gold jewelry to turn into ready cash. Small investors do not seem to have very many options. Just stay in your 401k and save until retirement. However, this is not entirely true. There are Penny Stocks.

Penny Stocks are those that sell for less than $5. They are particularly attractive because not only do they sell small, but also they are volatile enough that you may end up with a boatload of money with a single day of trading. This volatility can also cause one to lose his or her shirt also. There are some precautions that need to be taken and tips that can make the whole process easier.

First, how can I find them? Penny stocks can be sold on any of the exchanges, but they are mostly listed at either the Over the Counter Bulletin Board (OTCBB) or the Pink Sheets. These tow exchanges are specifically designed to handle Penny Stocks List. They can be accessed via the internet (like any other exchange) and are traded in the same way. These two companies do not require the same level of oversight that the NYSE and NASDAQ do, but they still have some good stocks.

Is it safe? Well there is risk associated with any investment. I mean, your house could burn down today. Your 401k might tank because the blue chip stocks that it has in its portfolio are hemorrhaging money. No investment is completely safe. However, there is a lot of volatility associated with these stocks. The reason for that is that they trade at such a small value. If you buy, for example, IBM and that company makes a 1% gain you have had a good day. For the micro caps, if they gain a $1 you could have just recognized a 100% gain. See the attractiveness. Unfortunately, there are also sharks in the water. It is easy to manipulate the stock because it sells small. Do some research about the company, and do not trust to Internet ads.

Can I make money? That is the most attractive feature of Penny Stocks List. You can make a lot of money. Because they sell so low and are so volatile, it is possible to make a large amount of money on a very small investment. All you have to do is watch the trends of the particular company that you wish to invest in. A lot of the smaller these days are involved in Biotech or some other sort of technical endeavor. These companies may be relying on one product to put them over the top. They ask for investors so that they can fund the research. After the product is launched, you could realize a large return on investment.

Therefore, it is possible to make money and be safe with Penny Stocks. However, the only person who is going to protect your money is you