Timely Advice For Investing In Penny Stocks

By Author: Ed Stocks
Total Articles: 2
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Investing in penny stocks is a great way of making money in the stock markets. But this is an activity that is fraught with risks. Not everybody is familiar with the right companies to invest in and the right time to invest money in these companies.

Investing in penny stocks is a great way of making money in the stock markets. But this is an activity that is fraught with risks. Not everybody is familiar with the right companies to invest in and the right time to invest money in these companies. Investors need professional advice before such ventures. There are many professional investment firms whose advice can be sought. They have spent many years in the industry and possess ample experience in this field. These companies have analysts who spend their time researching the prospects of various companies. The reports that they provide have proven to be useful for many investors to make the right decisions.

Such research is ideal for novice investors, experienced day traders and seasoned money managers. Many of these firms are staffed with well trained professionals who work on Wall Street. In their teams, one can ...
... find economists, former brokers, hedge fund analysts, traders, technical analysts, researchers and market experts. Thanks to their timely investment research many clients have been able to earn a considerable amount of income. These analysts focus on different aspects of the stock. Their knowledge on each individual sector is quite expansive. This helps them identify a penny stock with a huge profit potential.

Penny stocks are also known as cent stocks in some countries. These are the common shares of small public companies that trade at very low prices. In the United States, these are shares that trade at less than five dollars a share. In the United Kingdom, these are shares that trade at less than one pound. The problem with penny stocks is that they are very volatile and are prone to frequent manipulation by promoters and unscrupulous traders. Investors who do not track the movement of these shares closely and do not have background details of these companies can lose money trading them.

Penny stocks are traded on over the counter bulletin boards or pink sheets. A list of these shares can be seen on a daily publication that is compiled by the National Quotation Bureau. It is easy to tell when a company is trading on the pink sheet because the stock symbol ends with the letters PK. Many of these shares are issued by small companies, start-up companies and companies with liquidity problems. Each investor has to decide for himself whether he wants to buy penny stocks or not. The investor should be prepared to take losses on the trades from time to time.

But once they have decided to trade, they should find a reliable online brokerage firm to help them with the transactions, since these shares are not traded on the major exchanges. Even good penny stocks need to be purchased in large quantities for the trader to make a substantial profit on his investment. The backing of a good investment firm is needed to identify all the hot penny stocks. Only they have the experience and the knowledge to help the investors navigate through these murky waters that are fraught with risks. Their assistance can ensure that investors to make decent profits.
Resource: http://miamistock.com/