The Joys Of Penny Stock Investing

Penny stock investing is basically looking for stocks that sell anywhere from $1 to $5. These types of stocks are going to be considered speculative and can be very risky. You will also here these stocks referred to as small cap and micro cap, all they are talking about are penny stocks. You will not find the big companies lumped in with penny stocks, however remember they were in this category at one point. Your job so to speak is going to be finding the "next big thing".

Just because stocks are going to be selling low does not mean penny stock investing will be any less profitable. It also will no where be a waste of your time if done right. There are plenty of companies that started out as penny stocks such as Jenny Craig, 7-Eleven, and PetSmart. You know where all those companies sit now, they are all traded on the NYSE and NASDAQ. You are just going to have to do some homework, but the profits are sitting there just waiting to be taken.

You have to realize that blue chip stocks that you hear about are very expensive and the companies have been around for a long time. These types of companies have a proven track record and more than likely their profits will remain about the same or continue to climb slowly. If you have the money these are great stocks to invest in for future investments. Penny stocks on the other hand are not so quite well known and we really have no idea how they are going to rate. We can end up with a winner or we very well could lose part or all of our investment.I

Penny stocks are the hidden gems in the investing world. You are going to have to do some research and go out and look for them. Penny stocks are not listed in the Dow Jones Utilities Average, the S&P 500, the Wilshire 5000, and the Russell 2000. If you are wanting a great free reference I want you to head down to your local library and search out the book Walker's Manual of Penny Stocks. This is an invaluable source for learning all about penny stocks and what companies you should be looking at. I have also included a link at the bottom of this Squidoo page that will help ypu out or you can sign up in my bio box for some great information.

Almost all penny stocks are traded over the counter or OTC for short. You will find them located in the pink sheets or the OTC Bulletin Board. Before you lay even one penny down please check the companies financial and make sure they are registered with the SEC. My recommendation is if they are not registered go somewhere else and save yourself a lot of possible grief.

The one main thing I suggest to people looking into penny stock investing is to look for quality. You will be able to see this in any reputable company, look at their previous earnings, their growth, and significant gains over time. Look into what goals the company had laid out for itself, long term and short term. Also when doing your research I want you to look into the company's valuation, existing revenue stream, financial solvency, longevity and history, profitability, and number of employees. All of this put together will give you great insight into whether you want to partner up with this company.

I Think the biggest fear or danger in penny stock investing is that because of the size of many of these companies they are not regulated by the SEC to file financial reports. So we are left trying to sift through a lot of information trying to figure out what is the best of the best. The lack of public information, no minimum listing standards, and risk are the biggest deterrents to investing in penny stocks.

If you are looking for even more information about penny stock investing please click on my link at the bottom of this Squidoo lens or feel free to e-mail me in the bio box and Id be happy to send you some very valuable information. I've included a testimonial from Tony who will give you some more information about the program I am offering to you below. I wish you the best of luck and hope you have great success in penny stock investing.