Companies do not spring up complete from the ground. They have to grow and develop into giants.
Simply put, penny stocks are shares of small and public companies that are valued at less than a single dollar. The question for most people is “where to buy penny stocks?” since it is a great place to get started as an investor.
How to Buy Penny Stocks
If you want to know where to buy penny stocks, you’ll need someone called a ‘broker’. This is the person who will find you the penny stocks you want to buy. Think of this person as your middleman. You tell them how much to bet, where and when and they’ll handle the little details for you – for the right price.
They’re the ones who you talk to. Let us say you found penny stocks you want to purchase. The broker will handle the technical details for you. While there are full service brokers, the commission might keep it from being profitable so most people suggest that when you’re dealing with penny stocks you should stick to a discount broker.
There are different kinds of orders, from orders that limit the amount you can lose to orders that are placed only when stocks behave a certain way. This can leave you free for other business as the investment will only be placed when it is appropriate.
How Much Money is Required to Buy Penny Stocks?
Well, the name may be misleading – you’re going to need a lot more than a few pennies to get into it. Naturally, the more you can afford to put into these penny stocks the less the stock actually has to rise before you profit past the commission costs. This also means that you’re at greater risk. However, there’s no way to get real profit without taking on some risk.
A good rule of thumb is to have five hundred dollars per penny stock you’re thinking of purchasing.
How Many Penny Stocks Should You Get Into?
Putting all your eggs into one basket is a bad idea. Now, putting your eggs into three baskets can work out nicely. With only three stocks you’ll be able to do enough research without being overwhelmed. With more than three stocks, chances are you’ll find yourself running yourself ragged. After you’ve gotten some experience on your belt, you may be able to handle more penny stocks at one time.
Finding the Best Penny Stocks
Timing is important in a lot of things. Investing in penny stocks requires immense timing and some luck. It is easy to find hot penny stocks, but it is difficult to find them before they can get hot, before they’re profitable. There are ways of making sure that you maximize the odds of finding profitable stock.
What you’re looking for here is a real and reputable company. There are a lot of scammers out there, unscrupulous people looking to make a quick buck with a faked company and faked investments. Naturally, you instantly lose money the moment you put money down in a fake company, so the first step is to make sure that you’re buying into a real company.
There you have it. Now you know where to buy penny stocks, how to find them and how to buy them. Just remember to think outside the box when you can. You should also make sure that you don’t get in over your head. Investing, whether in penny stocks or bigger stocks, can get very intense. Start small. Youll have plenty of time to bet big when you have more experience.
In case you want to start trading penny stocks yourself and neeed some guidance (and trust me, you definitely do need guidance) there are two programs I highly recommend: The Penny Stock Prophet and Penny Stock Psychics