The only way to get ahead in investing in pennystocks is to find the right pennystock. Which is not easy. Here are some tips.
If you want to find US pennystocks to watch, you can check out internet forums.
Investors sometimes go online to offer tips about these risky, but possibly rewarding investment choices.
You can visit a forum to learn about Canadian penny stocks, too. There are lots of things that you might learn. Here are some of the basics for beginners.
Pennystocks have many fans. Small investors have made small fortunes with these "off- market" trades.
Brokers and other financial experts have different definitions about exactly what qualifies as a penny stock. Most agree that a single share can be purchased for less than $1US.
In some cases, a single share can be purchased for less than a penny. That is the origin of the name.
The Securities Exchange Commission has a little different definition. They include stocks that trade for less than $5 per share. The term could also refer to any stock that appears on a list known as the Pink Sheets.
But, the Pink Sheets include other off-exchange securities as well. Not all of the companies listed are penny stocks. Since 2000, many people have seen their investments in these smaller lesser known companies pay off. Buying a blue-chip stock is not within everyone's reach. Anyone can buy penny stocks. Whether or not you should buy depends a lot on your own personality. If you are a person that likes to take risks, then do some more research and buy some Canadian penny stocks.
Who knows? You might find some good penny stocks. You might even discover the next Google or Sprint Nextel. Both of those were on the Pink Sheets list at one time. Some investors feel that the Pink Sheets have an undeserved reputation. You may have already heard those people talking.
The thing to remember is that many of the companies on the listed on the sheets are just starting out. They might make it. They might not. Even good pennystocks are not usually an equity used in daytrading. The values do not change that quickly unless something "fishy" is going on. There have been instances in which brokers have acquired multiple shares of a company the Pink Sheets or the OTC Bulletin Board for less than the current market price.They turn around and sell their shares at the current price for a profit, often by running some kind of internet promotion.
The shares are referred to in the business as chop stocks. Selling chop stocks is legal, although the practice is discouraged. Other scams are illegal, but it's hard for the SEC to monitor the scams.
Companies on the Pink Sheets are not required to disclose financial information. Scams can cause the value of a pennystock to fluctuate within a day's time. Because of that, day trading is probably not a good idea. This is a small investment that you hope will grow over time. If you do buy and the value goes up for some reason, you can go ahead and sell or you can wait to see how high the value climbs.
Whether or not the value goes up because of a scam doesn't matter as long as you are not involved. That might not be the most ethical advice, but it is the truth. Online forums are not the only places where you can go to learn about pennystocks. It's just one of the places where you can get honest information.
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