What are Penny Stocks? Top Ten F.A.Q. #1

Author: Dale Donner

Author: Dale Donner

What are Penny Stocks? Penny Stock Investing: Top Ten F.A.Q. #1 This topic is part of a series from Pennychase.com on the top ten Frequently Asked Questions from penny stock investors. They have also been filmed as FREE video tutorials which can be accessed from our homepage at: www.pennychase.com. Penny stocks are common stocks that trade from a fraction of a penny up to $5. These stocks are not listed in either the NASDAQ or NYSE. Penny stocks are traded over the counter through the Over the Counter Bulletin Board Exchange (OTCBB) or Pink Sheets. The SEC considers any stock below $5 a penny stock. The market capitalization of a penny stock is less than $50 million. Penny stocks generally represent the small companies that are spread across America. The attractiveness of a penny stock is that it does not cost much money to invest in them. Thus you can buy a large volume of shares in a given company relatively inexpensively. It offers you a chance to control a significant stake in a company without a high capital investment. If you can invest in penny stocks in the right manner, it can really give you huge return on capital, remember, even Bank of America was a penny stock at one point in time. The flip side is that penny stocks could be riskier than normal stock investments. Also information about these companies can be hard to find, thus making it extremely easy for the stock prices to be manipulated. Transparency into the operations of a penny stock company can often be next to nothing, so it can be hard to predict future growth prospects of a given company. Penny stocks also offer a tremendous return potential. There are instances where a stock has grown from 20 cents to $20 in a matter of months. That is a whopping 10,000% profit! Thus you can get spectacular gains from investing in penny stocks in a matter of days or sometimes even hours! These are high risk, high reward, instruments and you will need the advice of a professional firm specializing in penny stocks to help you avoid losing your investment. Penny stock prices fluctuate widely and a stock can be absolutely worthless if you dont sell it at the right time. You also need to heavily research the penny stock that you plan to invest in and constantly keep track of price fluctuations. At PennyChase, we offer you verified penny stock picks which can increase up to 500% in a single day! We have a dedicated team that constantly monitors price and volume information on a real time basis to identify buy and sell signals. Well even give you our opinions on your stock choices absolutely free. To learn more about penny stocks, and to get hot tips about them, subscribe to our 'Pink Sheet Picks' penny stock selection newsletter. www.pennychase.com/Pinksheetpicks.html Thanks, TJ Pennychase Editor, Pink Sheet Picks About the Author:

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