Small Investments

Not everybody that would like to invest in the large stock markets like the NASDAQ or the NYSE have adequate funds to do so but there is an option they have which would allow them to start investing with far less than they would need on those stock markets. That option is in penny stocks. This may prompt you to ask what are penny stocks and the answer would be that they are stocks in small companies which are not large enough to have their shares bought and sold in the larger stock markets alongside blue chip companies. These small companies, usually worth less than $50 million have shares that may only cost pennies to buy and hence the name penny stocks. The problem with penny stocks though is, as they are not traded in the large stock markets, they do not come under the rules of the Securities and Exchange Commission (SEC) which means that they do not have to disclose as much information about themselves as they would if they did come under SEC rules. Investors may therefore find it hard to learn anything about a company they are investing in which has prompted some people to say that they are gambling rather than investing. Regardless of what these people think though, people have made large amounts of money by investing in penny stocks and some have even become penny stock millionaires and so it is possible to be successful in this type of trading. Statistics show though that 90% of penny stock investors lose their money and so only 10% find penny stock investing profitable. When interviewed some of these penny stock millionaires have said that they devised a strategy for their investing and they stuck to that strategy but have not really disclosed what that strategy was but it is believed that one part of the strategy was to never trade more than 10% of their stocks in any one day. Even though a investment in penny stocks can be small, the stocks can be very versatile and so can go up in value rapidly, just as they could also go down very rapidly and so it is possible to make money fast but also possible to lose it equally as fast. This has meant that even those people that may refer to investing in penny stocks as a gamble to admit that, like most forms of gambling, the risks may be high but the profits can be equally as high. There are some stock brokers that deal in penny stocks and so your best way to probably start this type of investing is to find a stock broker that does and invest through them. Even the smallest of companies may one day become a large corporation and if you have penny stocks in it from the start, the price of those shares could skyrocket as the company becomes successful. That is why it is perhaps essential to try and find out as much about a company and its potential for growth, as you can before investing in it.