There was a time when a penny could actually buy you something. A soda, for instance, or even a stick of gum at the local candy store. Today, though, a penny isn?t really even worth the scrap metal it?s made of. In fact, for most people, stopping to pick up a penny in the street would actually constitute a loss, since the time that it would take to bend over and retrieve the coin is actually worth more than the coin itself!
It may come as a surprise, then, that the one place a penny still holds significant value is the stock market, and more specifically the pinksheet and OTCBB(bulletin board) exchanges. On these specialized exchanges, a penny can buy you as much as 100 shares of some smallcap companies! Sure, these companies are usually struggling, just starting out, or in some cases, not doing business at all. But hey, you still own a piece! And if that company pulls itself together, lifts itself off the floor, dusts itself off and produces the next, say? iPod, well then you just turned that penny into at least a good twelve dollars!
But most of us actually have more than a single penny to begin our penny stock investing strategies, and with that in mind, I have put together a few penny stock investing guidelines that will hopefully help someone avoid losing their entire investment capital, and just maybe even turn a profit with their penny stock picks and penny stock investing decisions.
Penny stocks, penny stock picks and penny stock investing?the basics:
Penny stocks, as defined the Securities and Exchange Commission (SEC) are securities that consistently trade at or below $5 USD. However, most penny stock investors in the industry simply refer to any stock trading on the bulletin board or pinksheets exchange as a ?penny stock? whether it actually trades for a fraction of a penny or more than ten dollars.
Another factor that can classify a stock as a penny stock is the company?s market capitalization, or ?market cap? where a market cap below a certain level is considered a ?smallcap? company, which means its stocks are considered smallcap stocks, also commonly referred to as penny stocks.
A couple other terms that are basically interchangeable with the term ?penny stock? are the terms ?microcap stocks? and ?nanocap stocks? which basically mean the same thing. Penny stocks, smallcap stocks, microcap stocks, nanocap stocks, and a bunch of other terms can all be used to describe to penny stocks, and it?s basically a matter of personal preference and of course the words that you are accustomed to hearing everyone else use to refer to penny stocks.
How accurate are penny stock picks, and Can I get rich with penny stocks?
Penny stock picks vary greatly in their levels of accuracy. Keep in mind that penny stock picks are simply a selection of penny stocks that one or more penny stock investors and/or penny stock analysts have compiled after conducting their own due diligence and research on them. Penny stock investors that have been investing in the penny stock arena for many years usually developa ?sixth sense? for hot penny stocks that are poised to make significant advances, or even penny stocks that look great on paper but are about to produce losses for their investors.
Penny stock analysts, and basically stock analysts in general, are usually very intelligent, mathematical, logical, ?numbers? people. You know the math whiz that you cheated off of in high school, or the kid who could read anything once and memorize it forever? Those are the types that generally make good penny stock analysts, and when they?re not troubleshooting or creating new investment strategies and algorithms for huge hedge funds, sometimes they also lend their time to penny stock websites, analyzing, researching and picking penny stock picks that are sent to the penny stock picks newsletter subscribers for that penny stock investing website.
Penny stock picks that have been researched and analyzed by actual penny stock analysts (stock analysts, financial analysts, etc) are the ?top shelf? penny stock picks, and can prove extremely accurate, as well as profitable, for savvy penny stock investors. All in all, penny stock picks are a smart way to develop your penny stock investing strategy, and for many penny stock investors, penny stock picks are what keeps them profitable, year after year.
I am sure that I want to be a penny stock investor, and invest in penny stocks. What do I do now?
The bottom line is that penny stock investing and especially day trading with penny stocks is one of the most risky investing strategies, period. The most important thing to remember when you get started with penny stocks is that every single time you buy penny stocks, you must be prepared to lose your entire investment, even if the penny stocks do increase in value just as you predicted, and the market depth for your penny stocks increases, and there are plenty of penny stocks buyers and everything seems perfect.
It is extremely important that you never invest in penny stocks if you cannot afford to lose your entire penny stock investment capital (for that particular penny stock investment, anyway).
Now, with that out of the way, penny stocks?and penny stock investing?have made a lot of people a lot of money, and penny stocks will probably continue to be one of the fastest ways to produce substantial wealth without substantial outlay. Penny stocks can produce returns of up to 1000% or more in a matter of minutes, meaning that a penny stock investment of $1,000 USD at the opening bell could become $1,000,000 USD before lunch, if you purchase the right penny stocks and you know when and how to sell those penny stocks.
Remember, investing in the correct penny stocks is part of the battle, and that is where quality penny stock picks come into play. However, you still have to sell those penny stocks in order to monetize your penny stock investment and capitalize on your penny stock investing strategy.
In summary, penny stocks can be incredibly profitable, but only if you always remember that penny stock investing is a double-sided blade, and what makes you rich can also make you poor, and just as quickly (if not even quicker)! So if you are set on penny stock investing, and you have made up your mind that your path to riches involves penny stocks and penny stock investing, then go for it! Sign up for some high quality penny stock picks (see the link in my profile and signature for a good source of quality penny stock picks), and remember to keep your investing strategy low-key to start, while you learn the industry and start to understand penny stocks and how penny stock investing works.
Once you become more comfortable with penny stocks and you feel ready to make larger penny stock investments, begin to increase your penny stock investments by a small amount and let your earnings catch up to your increased spending before you move on to buying larger amounts of penny stocks.
For more information regarding penny stocks and penny stock investing please visit PennyStockNewsletter.info today!
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