Start investing in Penny Stocks

Friday, April 29, 2011 | Labels: | |

A penny stock is a common stock trading at $1.00 or less. Penny stocks are sold at such low prices that they entice many investors, particularly first-time investors. These low prices allow novices to explore the markets, without risking an extensive amount of money. Furthermore, if the stock were to dip in price, the investor will not have lost excessive amounts of money.

Here are some ways to start investing in penny stocks:

1. Scroll through stocks

Scroll with the day's "most active" and also the day's "biggest gainers" on the NASDAQ and DOW. Links are provided within the Resource Portion of this article. Discover the stocks which are currently trading around the one dollar range $1.00.

2. Research companies

Investigate the companies with penny stock investing offerings that you like. This can be done by hitting the stock symbol and viewing charts or going directly towards the company website.

3. Start investing

Start an account by having an online brokerage firm; these are usually less expensive for trades than a local broker. You can also choose only to purchase stocks from companies with direct purchase options. This option can help you avoid brokerage fees. Navigate to the website and print a regular purchase form or request one to be mailed. Read the requirements such as minimum purchases, fill it out, attach a check, and mail it. Never invest a lot more than you can afford to get rid of think of this like a state lottery where 1 in a million win.

4. Disseminate your investments

Purchase small cap stocks from the 3 companies. You never know if these businesses will succeed or fail, so do not invest your eggs into one basket, diversify. Enjoy investing in penny stocks, sort of like playing "Life" or "Monopoly."

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