Stock Market Tips

Penny Stocks: Are Penny Stocks Legal?

Penny Stocks: Are Penny Stocks Legal?

They don’t trade on the main stock exchanges. They have not been approved by the SEC, but nor have they been disapproved by the SEC. They are labeled as a high-risk investments. Very little is even known about them, and they’re often used in Internet e-mail spam scams. …Are penny stocks even legal to invest in?

Though they may sound scary and they may be unknown, even a little mysterious, there’s nothing illegal about investing in penny stocks. There’s a lot of information out there, a lot of it bad and much of even frightening, but investing in penny stocks doesn’t mean that you are breaking a law.

Tip: Be realistic. You are likely to be very disappointed if your expectations are to have double-digit returns each year.

It means you’re taking a chance, but there’s nothing illegal about that, is there? Yes, penny stocks are considered high-risk investments, but for a relatively small price investors can buy shares and (one hopes) turn around to make a large profit. This is the draw of penny stocks, what makes them compelling.

Also, when you buy penny stocks through a broker, you should get regular updates. Once a month, you’ll get information about your penny stocks and what their status is. This is something your broker has to do if you’ve invested in penny stocks, something that the broker is actually required to do. This lets investors track the progress of their stock.

Tip: Try to find a great investment service you can get connected with. You only need to subscribe to one if you find one that is of high quality.

The only trouble is, sometimes things happen very quickly in the world of penny stocks. These stock infrequently trade, and when they do trade they are not traded through the well-known and established stock exchanges. This makes is hard to both buy and sell penny stocks, so some investors are afraid of getting “stuck” with a stock that they can’t unload.

However, a stock’s risky nature doesn’t make it illegal, or even a bad investment. There are many things that are risky (like driving), but many people don’t let high risk stop them. In the world of stock investing, there is often risk involved. Perhaps penny stocks are considered riskier than some, but at the same time there is great potential to make a lot of money by investing in these penny stocks.

Tip: Companies with high returns are more appealing to investors, rather than ones with good management. Management changes hands often, while the economic competency of a company does not.

Penny stocks are low-priced, shared of companies that are generally on the small scale. These stocks are traded “over-the-counter” rather than on public exchanges, and this is why many investors know very little about penny stocks in general. To find more information about penny stocks, you can talk to your broker or do a little research in business journals and the like. There is information out there, and there are investment opportunities available. It’s just a matter of finding the rights ones for you.

If you’re considering an investment in penny stocks, it’s okay. Risky, yes. Mysterious, definitely. Potentially big? Sure. But illegal? No, not at all. At least right now, penny stocks are traded completely legally and under the guidelines of the SEC. Investing in these stocks can be a little exciting and a little dangerous, but you won’t wind up in jail.

Read More

Penny Stocks Getting Started

Penny Stocks Getting Started Introduction to Penny stocks: Penny stocks are low priced speculative stocks and these stocks are traded in over the counter (OTC) market. As per SEC (The Securities and Exchange Commission of United States) the maximum p…

Read More

Penny Stocks: Aren’t All Penny Stocks A Scam?

Penny Stocks: Aren’t All Penny Stocks A Scam?

Most Internet e-mail users have been subject to penny stock scams. There are more than fifty billion spam messages sent each day, and many of these mention investing in penny stocks. Spam isn’t a very reliable investment source, right? Does that mean that all penny stocks are, essentially, some sort of scam?

Penny stock scam is a sad fact of using the Internet. It’s possible for people to lose 8% of their investment when falling for these penny stock scams online. Often, these penny stocks do not exist or they do not exist at the advertised price. This type of scam is called a “pump and dump.” Yes, there are some scams on the Internet that center around penny stocks.

Tip: Learn about the stock market by watching what it does. Keeping track of the market before you decide to buy can help you know what you’re doing.

This does not mean that all penny stocks are a scam, or even a bad investment. There are some penny stocks that can make investors a good amount of profit, in fact…just not the ones you find advertised in spam. Stopping yourself from investing in those penny stocks is a great idea, but deciding never to invest in penny stocks of any kinds because of that may not be.

Yes, there are considered a high-risk investment, but it’s also possible to turn a pretty profit by using penny stocks. In most cases, there is a certain finesse needed to invest in these stocks, as they rarely trade and sometimes things happen with penny stocks very quickly. Investors have to know what’s happening all the time and be ready to make a move when needed – making penny stocks somewhat exciting and interesting to trade in. This is why some investors like them.

Tip: Stocks are more than just pieces of paper made for buying and selling. When you own some, you become a member of the collective ownership of that specific company you invested in.

Don’t let Internet scams scare you away. There are a lot of Internet job scams, too, where so-called “employers” offer to pay you lots of money to do something simple like answer surveys or surf the “Net. In many cases, these “job offers” turn out to be nothing but an Internet scam, and a clever ploy to try and get your hard-earned money. But you don’t let Internet job scams keep you from working – so don’t let Internet penny stock scams keep you from investing. That still means that the scam artists win, because they’re keeping you away from something.

To learn which penny stocks are potentially good investments and which are potentially bad, there’s lots you can do. Check the business journals and stock information, or ask a broker for more information and advice regarding penny stocks. There are good penny stocks out there, and there are investments out there where you can make a lot of money. By doing your research and looking into every possibility, you increase your chances of success in the stock market. And isn’t success what it’s all about?

If you’re interested in investing in penny stocks, you can’t let anything (even scams) stop you. Do what you want to do and invest your money where you think it’s best. After all, it’s your money and only you can decide what you want to do with it. Make the choice for you, not for any other reason.

Read More

How To Get Started With Penny Stocks

How To Get Started With Penny Stocks

You might have heard the term “penny stocks” in conversations with friends and family. You might have received email promising overnight riches with penny stocks. Perhaps you’ve even received a call from a telemarketer about the latest hot tip. While investing in penny stocks can potentially make you a fortune in a short amount of time, it is a very risky venture. In order to hedge the risk, you should follow certain tried and true strategies to help you keep your money safe.

When getting started with penny stocks, don’t rush. Read as much material as you can on penny stock investing. Before actually diving into a stock investment, you should understand as much as you possibly can about the subject. This will help you to avoid costly mistakes and even enable you to make a profit. Don’t reinvent the wheel. There is a lot of material available that chronicle other people’s mistakes. Internalize them.

Tip: Knowing your risk tolerance is vital. All investments carry some risk.

Second, investing in penny stocks is different from investing in other vehicles such as bonds, mutual funds, and real estate. While many general investment terms and concepts apply across many investments, penny stock investing has its own unique language. You should take the time to learn the jargon.

Third, never jump into trading with your own money. Learn the ropes of investing by paper trading. By doing so, you can generate a comfort level with investing in this high-risk arena without actually risking any real money. Paper trading will help you gain the confidence you need to enter the actual investment arena.

Tip: While it’s a great idea to be passionate about the market, make sure it doesn’t consume your life. Obsessing over your investments will only lead to frustration and burn-out.

Fourth, evaluate your goals and be clear about what you want to achieve. Do you want to engage in trading for short term profit? Do you want to fund your retirement? Or do you just want to experience the fun and thrill that buying and selling penny stocks can bring? Each of these requires a different strategy and mindset. When you’re clear with yourself about your goals, you can have a solid and focused trading strategy. If you don’t have a clear goal from the start, you can end up trying too many different things at once, yielding no profits at all.

Last, decide on how you plan on researching, monitoring, and trading your penny stocks. You might want to take on the challenge of trying to be a successful stock picker. Perhaps you’re the do-it-yourself type who likes to do his own research and come up with a custom methodology that is unique. Or perhaps you are serious about maximizing every penny and want to hire a professional to assist you with your investment ventures. Once you decide to hire someone or go out on your own, where do you plan on finding information about your potential investments? How do you plan on tracking your portfolio’s performance? Once you have an idea about accomplishing these items, you might just be ready to let your money ride.

Read More

Don’t Fall For The Hot Penny Stocks

Don’t Fall For The Hot Penny Stocks

Statistically, investing in penny stocks has resulted in more overnight millionaires than any other investment vehicle. To be among these ranks requires a large tolerance for risk, an even larger bank account, impeccable, flawless timing, along with choosing the hot penny stocks. There are many people and companies that will try to sell you the miracle shortcut to riches. Here are some examples of what to avoid when investing in hot penny stocks.
First, be especially careful with telemarketers. Most reputable and legitimate companies rarely, if ever, resort to using telemarketers to sell their stock. A phone salesman trying to peddle investments and the next hot penny stock is likely a fraud-monger. These telemarketers are extremely slick. They will have you believing that the hot penny stocks they’re selling is your ticket to financial independence. They’ll use high-pressure tactics to get you to buy today. They might even act like your best friend and advisor. Make no mistake, their only interest is to off-load some over-the-counter stocks that are virtually worthless. If you actually invest in one of these schemes, you might find it almost impossible to sell off the hot penny stocks you bought. The movie “Boiler Room” is a perfect example of this type of peddler.
Next, steer clear of very low volume stocks. When stocks aren’t trading with any significant volume, you will be unable to purchase or sell the penny stocks for the prices you want. Further, it clouds any sort of educated judgment you can make about where the stock is headed. Don’t be suckered into buying very low volume stocks being billed as the next hot penny stocks tip.
The hot penny stocks tip is a classic sham to be avoided. There are professional promoters whose sole job is to generate hype about a particular stock. They bill the hot penny stock as the next big thing, guaranteed to skyrocket and yield tremendous returns. It is like a bad rumor come to life. The tip is spread by word of mouth offline and over the internet. You might have even been the recipient of one of these rumors yourself. “Hey buddy, I got a hot tip for you, sure to make you a boatload of cash!” The rumors start spreading like wildfire, and the excitement generated will cause people to buy the stock without exercising any sort of due diligence. The truth is, if there really were a penny stock that was red-hot, you likely wouldn’t hear about it because those that are privy to the information will likely keep it to themselves.
With the promise of instant riches, it’s no wonder so many people are taken by shills and shams. Participation in these schemes definitely generate a tremendous amount of profit. The problem is, it’s at your expense.

Read More

Fraudulent Activities In Penny Stocks

Fraudulent Activities In Penny Stocks An Introduction to fraudulent activities in penny stocks: We all suffer from some kind of fraud or misappropriation of our money from cheaters many times in our life. There are few people engaged in fraud and use…

Read More