While most stocks are denominated in terms of greenbacks, there are stocks out there that sell for as little as a penny. These so-called penny stocks are known for their low price tags, usually under a greenback, but they have some other things in widespread as well.
How to Invest in Penny Stocks
With the wild gyrations of the stock market comes the unscrupulous brokers pushing poor investments such as penny stocks. Even though the average worker can afford a couple of thousand shares of a penny stock, is it worth the gamble? Are there any decent penny stocks available?
The Securities Exchange Commission defines a penny stock in essence as a speculative investment in a very small firm which trades under $5 a share. Brokers often push penny stocks with big commissions designed into the selling price. The shares are usually thinly traded, making price tag manipulation easy. Most penny stocks go out of business, often encountering bankruptcy. Penny stocks are about as strong an investment as scratch-off playing cards.
details on penny stocks is scarce at best as they are not registered with the New York Stock Exchange or the SEC. Their latest rates are found in the Pink Sheets, which is now available electronically. Most don’t trade every. day. Insiders of penny stocks often sell their falling shares to hapless buyers. Crooked brokers often run the selling prices up or down, leaving their unlucky customer with a loss.
However, there are some small companies, start-ups at best, buying and selling under $5 a share, which show promise. These firms present a aggressive product or service. The firm uses a business plan to pave the way to success. corporation administration can be qualified and able to see their aims through. And the company is more certain of becoming worthwhile if they have the capitalization and cash flow to full the job.