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Choosing the right Stock is a very complicated process and investors have different approaches. However, it is
wise to follow general steps to minimize the risk of the investments.
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Could Penny Stocks be Your Ticket to Stock Market Success?
By Mark Crisp
A penny stock is a stock that is not traded on a major exchange such as the NYSE, NSADAQ or
AMEX. It is usually traded over the Pink Sheets or OTC bulletin boards. The stocks generally sell for
less than $5 per share of stock, although some will argue that penny stocks sell for less than $2 per
share, but the point is that they cost very little per share. Investors are attracted to the penny stocks
because of the low investment price which makes them seem all the more lucrative.
Penny stocks have long fascinated investors because the potential to make great gains is there.
Because the volume of trading is low, a quick up tick in the market could net you a 1000% return on
your investment. Now you are starting to realize the potential to make a lot of money. The key, of
course, is in selecting the right penny stocks in which to invest.
Penny stock investing is not an exact science. You must do your research by reading the prospectus
that the company provides to you. They must list market potential for their product, list who the
competition is and list the challenges that they are facing in getting the product to market. In addition,
you as an investor must be very discriminating when it comes to reading press information on the
company. Is all the positive information written by the company’s own public relations agent or does
some come from outside sources?
Penny stock companies could be years away from getting their product to market. You must be
prepared to see little or no change in the