Cheap Small Cap Shares
Cheap Small Cap Shares
Cheap Small Cap SharesYou can start investing in micro cap shares without needing a lot of cash to start with and that can make investing in small cap shares a great way to learn about the stock market..
{For more information about Investing in the penny stock market check out Cheap Penny Stocks}
Small cap share investing is associated with a lot of hype because investors are attracted to the promise of making large returns with a small initial outlay.
But how many micro cap stocks start off cheaply at say 10 cents and go to $5.00?? In truth there are not many micro cap stocks will perform as well as that however it is much easier for a 10 cent stock to double to 20 cents than it is for a $50 stock to go to $100 but the cheap entry comes with it greater risks.
There are less shareholders involved in micro cap stocks than the more established shares and as a result micro cap shares tend to trade infrequently.
You could end up losing your entire investment as the low liquidity means that share prices can go down rapidly. You are much better off stopping right now and spending your time learning about other forms of investment if you are finding that investing in micro cap stocks sounds too risky for you.
{Looking for the best cheap penny stocks to buy? Check out Best Micro Cap Stocks}
So if investing in micro cap shares fits your risk profile you need to know where to find them..
You wont find small cap stocks listed on the NASDAQ or the NYSE or any of the other large exchanges, instead you must look for them at 'over the counter' exchanges such as the pink sheets or the OTCBB.
Micro cap shares do not fall under the same regulatory procedures as other more conventional shares, so even though they are legal they are still risky.
Penny shares are cheap to buy and that makes them attract to investors however you should refrain from investing all your money into the one stock but instead diversify into a number of shares to spread out your risk.
Just because a micro cap stock is inexpensive doesn't always mean it's a good investment..
Due to the nature of small cap stocks, investors can become a victim of fraud so it is imperative that you always check out the stocks before you buy.
You can learn about the companies that are listed, and you can follow the progress of these stocks to see if this is an area you want to become involved with.
Never just follow someone else's tip blindly, but investigate the company yourself and then watch the stock to see how it tracks before investing..
If you can set aside some time each week to increase your learning, you will greatly improve your chances of success in the penny stock market.
You can apply what you learn by selecting some inexpensive, good value companies and the more you learn the better you will become and the more money you will make!