Penny Stocks Risks to Avoid
Saturday, February 20, 2010
There are many people that are interested in investing in penny stocks. The reason penny stocks are getting a lot of attention is because they are inexpensive to buy and allows those people who can not buy stocks in the bigger market to get involved.
Since the prices of these shares are much lower it can be a dangerous place if you do not know what you are doing. It can be hard to resist in investing in stocks that are cheap but you have to always do your research. Buying without the proper knowledge can lead to huge problems. Penny stocks are not traded on the big market but instead are sold over the counter (OTC) or pinks sheets. Because these stocks are shares of small unestablished companies doing ones research in very important.
You also have to be absolutely sure of the sources you are using. There are many sites online that offer free information but some of it is fake. Always go with your instincts if you think its a scam it probably is a scam. If you do your research you can avoid these people and not hurt you chance of making a profit.
Many people think that if you start investing in penny stocks you will make money instantly, not true. Penny stocks do have a high potential of turning a profit but it takes time and it does not happen everyday. You should never get to comfortable although you can make a lot of money you can also lose a lot if you are not careful.
Although hiring a broker is a good idea never feel that you can not make your own decisions. If you research the companies well you should speak up and make the decision that you are most comfortable with.
There are risks that come with getting involved with penny stocks but the biggest mistake is investing money that you can not afford to lose. Penny stocks are a high-risk investment and putting up money you cant lose can lead to big problems. Only invest what you can afford in case you lose it. Penny stocks can be a great way to turn a small investment into a small fortune but never risk what you can't lose.
-M Petrone
http://www.RefinancingCondo.com
-M Petrone
http://www.RefinancingCondo.com
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