Do you want to make money by investing in penny stocks? If so, you've come to the right place! In this article, we'll teach you everything you need to know about penny stocks
from what they are to how to invest in them. We'll also give you tips on how to avoid making common investment mistakes, and provide you with a list of the best penny stocks to invest in.
Stocks ExplainedWhat are Penny Stocks? A penny stock is a relatively small company with just a little bit of capital, usually between $5 million and $50 million. They're so-called "pennies" because the equity valuation on several stocks in that price range can be only one dollar (the equivalent to ten cents).
Because they have less money invested than more common forms of investment like mutual funds or registered investment companies, they are prone to the same kinds of risks that all small stocks have.
To make things more confusing, many penny stocks don't actually trade on an active market. Instead, some rely on continuous quotation from a few big brokerage firms such as TD Waterhouse or PaineWebber (an older version of Intrade).
Others trade "over-the-counter": this means buyers and sellers conduct their trades directly by phone or fax. Still others trade on the American Stock Exchange (AMEX) or Nasdaq stock exchange, like GloriousSecrets and Healthpoint.com .
How to Invest in Penny Stocks Number of companies trading are low because they're hard to do research on - it's hard to know what a penny stock is even worth at any given time!
It takes time too see if penny stocks will become valuable over time - most don't stay around for long! Fees & Taxes There are only so many stocks that can potentially be purchased,