Penny Stock Investment

This article tells you about Penny Stock Investment. Stocks with market price below one unit of local currency are called penny stocks. You can invest your money in these shares and grow your money. People invest in penny stock market to convert their pennies into dollars. Penny stock market is for those people who have intelligent mind and strong heart. Your money can grow in it but there is high risk in this investment. Some of the famous penny stocks are: Nasdaq, Pink Sheets, OTCCB, Amex and Nyse.

Penny Stock Investment

Price of penny stocks fluctuate daily and it is risky to invest money in it. If there is heavy downfall in the price of shares then you will suffer a huge loss. Check the financial status and reputation of the companies which sell penny stocks. Sometimes, fraud companies or companies which are just door step away from bankruptcy sell these stocks.

Companies which have goodwill in market do not buy or sell penny stocks. Only new companies sell these stocks and you cannot get complete information about these companies. These companies do not release their audited financial records. In U.S.A, there is no law which can force these companies to release their financial records. So you cannot get any information about inner working of these companies and chances of suffering a loss are more.

Big Stock exchange like NYSE does not list penny stocks in its list. Infact, penny stocks are not listed in any famous stock exchange. Penny stocks are only listed in secondary markets like pink sheets. You can easily sell or buy shares in big stock exchange but it is difficult to sell shares in secondary market. If you are a big holder of penny stocks then you will get much lower price when you sell these shares in secondary market and you will suffer a big loss.

Sometimes the price of shares of some good companies also gets close to $5. These companies are not fraud. This creates a great confusion about whether to invest or not in the company. Don’t invest your money in that field in which you have no proper knowledge. Always take the advice of your financial advisor before investing your money.

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