subject: Are There Risks When Investing In Penny Stocks? [print this page] If you have been considering trying you hand at the stock market, think about investing in penny stocks. You will not need a large budget, and the potential is there to make a considerable profit.
Many first time investors try investing in this type of stock. They can be bought for a low price. Usually less than 5 dollars a share. Many small companies and newer companies offer them. You can purchase a small number of shares, and examine how the stock market actually works. If your shares do not do as well as you had hoped, you still have not suffered a big loss.
There are some advantages to purchasing these stocks. First, of course, is the low cost. You can buy several hundred stocks in a company for a very low cost. They are also very easy to buy. You do not necessarily need a broker. You can make the financial decision on which stocks to buy yourself.
Another advantage is that you can buy and trade at any time. You are not tied down to the time line that some other stocks have. Also the trade can be done very quickly. There are also many choices to choose from. You can buy stocks from several different types of companies. You also can buy over the internet.
You do need to consider some possible disadvantages to investing in this category of stock. There is a very high risk that you may lose money. More and more people are deciding to buy penny stocks. This makes more fraudulent companies more eager to try to scam the investor. You should always closely investigate and research any company before you decide to make an investment. Make sure that you are financially able to take any loss that you may see on your investment.
Deciding to invest penny stocks does involve some risks. However, if done wisely, they have the potential to be excellent money makers for you. If the stock does well, you can make a considerable profit. Even if you find the value going down, at least you will not have lost a fortune. Many people see this worth any risk that might be involved.
by: Mike Johnson.
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