Master Guide to Making Money with Global Penny Stocks

Many investors may not be so acquainted with “global penny stocks”, and these stocks aren’t that popular in the market, but they’ve managed to earn a fair share of popularity in the recent times. The popularity is solely because of the pricing advantage over the regular shares of different companies. With these penny stocks, one gets an opportunity to invest and get high returns at a very minimal initial cost.

What are Penny Stocks all About?

The term might make people think that it is all about shares that are worth a penny, but the term actually encompasses all the stocks that get sold for $5.00/share or lesser, although the penny stocks are normally of $1.00 or lesser denominations.

These stocks are not traded on securities exchanges like New York Stock Exchange because of their prices. On the other hand, they are sold in the market of over-the-counter, which is also at time referred as pink sheet market as the paper colour of penny stocks is pink.

Just like others even these stocks are tracked and monitored but the transparency is lesser compared to other traditional stocks as the companies involved in the trading process are comparatively smaller, and OTC considers these companies different from those big ones that trade on securities markets.

Downsides of Penny Stocks

The downside is that these kinds of stocks are very vulnerable to frauds and scams as it has been seen that at times people or companies try to sell almost all their stocks in a planned manner, thus artificially inflating their price, and once they feel that they’ve made the most out of those stocks, they sell out all the remaining stocks in one shot, which at times brings the price down dramatically. Having said that, the investors need not be skeptical about investing in all kinds of penny stocks, as with little research and guidance they can make good proportions of money.

Before starting to invest in global penny stocks, an investor should begin with subscribing to newsletters of different websites that keep a track of events and trends in penny stock industry.

It’s also a great idea to make a list of few good penny stocks that he/she would like to start investing in. And, then do the due diligence on all those stocks for a few days to monitor their performance before actually putting money on them.

Quick Tips from .S. Securities and Exchange Commission

There are few important tips from U.S. Securities and Exchange Commission that should be kept in mind before starting investing in these stocks.

• Knowing about companies and the penny stocks that they hold can be pretty difficult as the information about them are very little because they are normally small time companies.
• The trading happens at the investor’s risk as it is not SEC that monitors, disapproves or approves these stocks.
• It is always recommended that the investor should finalize the compensation of a professional broker prior to transactions.
• These stocks are not traded very frequently so selling these stocks by a certain date might be a difficult task.
• Take a look at the history of trends of penny stocks of a company and if you see no credible trading history, think twice before investing even if a professional broker suggests you to invest.

On the Whole

So, keeping these aspects into consideration, you should start investing in global penny stocks slowly, and carefully monitor their performance, and once you see good returns, you should improve the quantum of investment slowly. Remember not to get carried away and invest too much money blindly on any particular stock even if you get very high returns, because the risk factor is always very high!

Author Bio – Jolie is a personal finance advisor who has worked with several start-up firms, helped them in getting angel funding and even assisted them in preparing for the IPO. She has also guided hundreds of individuals in availing cash loan without running into an endless loan cycle, and coming out of their financial woes smartly.

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Tags: Business, Equities, Investing, Investment, New York Stock Exchange, Stock, Stocks and Bonds, U.S. Securities and Exchange Commission

Category: Investing