What is a Penny Stock?

Monday, February 8, 2010


Penny stocks are shares from small companies that sell for $5 or less. These stocks are popular because of their potential high payout. Although they are less expensive they also come with their own set of risks. The penny stocks represent the small companies that are in America and have yet to be discovered. Small companies that have not yet been promoted enough but has a good concept can be a good company to invest in.  

Most people shy away from penny stocks because of the risks that come along with it. Although these stocks are risker than others their rewards can be well worth it. There have been stocks of companies that have jumped from 25 cents a share to $20 a share. Companies that are now huge corporations like, Playboy and Ford, were at one time bought as a penny stock.

These penny stocks can be a great way to get into buying stocks because it does not require you to have a large amount of cash to begin with. Penny stocks have a great potential of turning your small investment into a nice profit. Not having to invest a large amount of money is great because you are not throwing in your life savings to get some good stock options.

Picking the right stock is a bit tricky and if you pick the wrong one you could just be wasting that money away. The stocks are difficult to pinpoint because of the lack of information on the companies and the risks involved. 

These penny stocks are great to make money if you are a beginner in the stock market. You do not have to have a ton of money and you do not have to tie up your money on something you may not be sure of. Look into the stock market and find a company with some potential and buy a few penny stocks and watch your money grow.

-M Petrone
http://premiumpennystocks.blogspot.com/


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