Penny stocks are very low priced stocks which can range from one cent to as high as ten dollars per share. With just a few dollars you can make a lot of money buying and selling penny stock shares. It is a great way for a new investor to enter into the stock market and figure out how it works.

Some of the worlds top investors started their portfolios on the penny stock market. Over the course of time they have made substantial amounts of money buying and selling penny stock shares. How did they make it happen? They did their homework and looked for companies which were about to experience huge growth.

They bought shares for pennies on the dollar, waited until market demand was high and then sold them to other investors. This is one of the biggest reasons the penny stock market has gained so much attention over the last few years. The potential for huge gains lures in new investors every day. How can you follow their lead and find great penny stocks to buy?

By consulting over-the-counter bulletin boards and pink sheets which have a vast range of companies to choose from. Before you jump into the market there are a few things to consider. It is important that you understand how over-the-counter bulletin boards and pink sheets work. Companies are not required to file documentation before they can trade on the penny stock market. Research the companies you are thinking of investing in.

You will be looking for companies which are about to go through a growth spurt or become part of the public sector. These companies will have spent years doing testing and trialing their products. They will have spent money on research and development to ensure the public will be interested the services they have to offer.

Companies that are about to go through a buyout also make good investments. Bigger companies will only purchase smaller companies if they believe they can be turned around and sold for a profit. You can make substantial gains by purchasing shares for pennies on the dollar. Once the company has begun to trade successfully you can sell the shares to blue-chip investors who will pay a much higher price.

If you are new to the penny stock market, consult a broker and have them do all the legwork for you. The broker will be able to explain, how to penny stock-market works and which companies are going to provide you with the highest returns. This can save you a lot of time, frustration and loss of money. Brokers will work hard for you because they want to get paid to.

Another way to learn about penny stocks is through free online tutorials, websites, newsletters and forums. Here you can talk to experienced investors and find out what strategies they use to make money on the penny stock market. These are all valuable strategies which will help you become a successful penny stock trader.

Leave a Comment Cancel Reply