Yes, that’s right – Penny Stocks can make you rich.
Penny stocks are stocks that typically sell for under a dollar a share, and many of them indeed cost just a penny (or less) per share. This makes them especially attractive, because almost anyone can participate. Think about it – how many shares of Google stock can you afford today? Probably not too many. But you can buy thousands of shares of a Penny Stock with just a few dollars.
There are four great reasons to love penny stocks:
- Price – As stated above, Penny Stocks don’t cost much. In many cases, they cost less than a penny a share. To give you an example, you may be able to buy thousands of shares for $25.
- Profit Potential – Just a tiny move in penny stocks can mean a large return. If a penny stock goes from 1 cent to 3 cents, you tripled your money. Try tripling your money with Google – it’ll take a decade (or three). Now imagine if you bought 10,000 shares of a penny stock at half a cent a share (which would cost you $50), and it goes to a dollar next week… This really happens.
- Legitimacy – Penny stocks are “real” stocks. They are fully SEC-regulated, and sold OTC (over the counter). And yes, you can buy them through almost any regular broker account (like E-trade, Schwab, etc… do you already have one of these? Then you can buy Penny Stocks.)
- Exciting Companies – Most companies who offer Penny Stocks are young, motivated companies. They represent an electrifying income opportunity (one you don’t have to wait years for, either).
However, there is one small drawback to Penny Stocks, and that is the fact that there are so many of them. So sifting through them is difficult. Couple this with the fact that many of these companies are young, without a long track record. This makes researching them a real chore that will challenge even a seasoned investor.
There is a salvation, however. There are websites out there who specialize in finding and researching penny stock companies, and then make recommendations on likely winners. One such company is StockTips.com. They make penny stock picks, and e-mail them to their subscribers. It’s free to join, as well.
You can also do your own research, of course. If you decide to do such, make sure you carve out a few hours to do thorough research… and be creative as well. Research new filings, and spend time on discussion forums where people are talking about young companies. When you find a company you like, learn everything you can about the company and its products (and if you really want to dig deep, order some of the products and see how well they’re made).
However you decide to go about it – your own research or joining the free mailing list of a company like StockTips.com, Penny Stocks are a legitimate, exciting investment opportunity that shouldn’t be missed.