Are Penny Stocks Suitable Options for Individual Investors?

Penny stocks are risky investments and it is really difficult to invest in them. The people who say that they’ve got immense return by their nano stock investments are the biggest liars. There are no one on this planet who’ve attained only profits with penny stocks. You might find a lot of losers from thousands of investments but the profitable results are on lower side. There are many chances for a person to lose from penny stock investments but still people purchase it for the sake of earning. Smart moves in penny stocks will lead towards better scope.

There is large amount of money involved in penny stock market, but trading penny stocks is not easy task. If someone wants to make good profit by trading penny stocks, they need to find genuine sources to get genuine penny stock information. You may have to face many obstacles to be successful in penny stock business and that is the primary reason that only few people deal in penny stocks as compared to other stocks. Before investing your savings in this market, you should beware of some important facts.

Are Penny Stocks Suitable Options for Individual Investors?

  1. You can easily mislead by an overly biased recommendation. Some specialized firms hype this low priced stock to make quick money. These firms use various mediums to complete their task, like publishing newsletters, internet, media etc. Most of these firms pumping shares because they paid for such shares. Because their self interest they are pumping stock higher despite of the quality of particular stock.
  2. One of the biggest disadvantages of penny stocks, they lack of transparency in reporting and information. The majority of penny stocks are not listed on formal stock exchanges. This means those penny stock companies don’t require to submit balance sheets and audited reports and other important reports which listed firms need to submit on regular basis. So you find difficulties to verify information of penny stock companies.
  3. Another big issue of penny stocks market is liquidity. Some penny stocks are very thin and it is very difficult to sell them at a specified time and price. The spread between bid and ask can be wide to deal with. This wide spread can cause big problems for investors.
  4. As penny stocks companies are not bind to reporting requirements they are usually in financial trouble and are not instructed to disclose real situation to potential investors. Penny stock companies are small scale companies usually have limited assets, and chances of their bankruptcy are higher than bigger companies. You have to find some reliable source to judge company’s financial situation, liquidity, nature of business and its future scope etc.
  5. As you have very less information on penny stock companies, and there is no transparency in their financial condition, it become very difficult for you to pick right stock. Major penny stocks are traded on some recommendations either from genuine dealers of penny stocks, or from those professional firms who mislead the investors by pumping and dumping game.

 You may see lots of ads of penny stocks that how lucrative they are, but if you do complete research penny stock trading is very risky option. Major problems are lack of information on financial transparency of company. Despite of all factors potential rewards of penny stocks attract more investors every year. Everyone wants to make money and penny stock trading provide them this option of making money in less time with less investment. Although before trading into penny stock market do your own due diligence like read stock market charts, analyze the repots follow the market trends. Penny stock market is difficult arena to compete with.

Penny stocks are best options to get ample of money into your pocket. Your wise decisions can turn over to a better outlook for these stocks and give you genuine results.

Penny Stocks: A good Financial Opportunity

If you want to make great profits in the stock market then invest in penny stocks. Lot of people is considering penny stocks as good investment option. The people who have desire to make quick profit finds penny stocks appealing investment option over others. While investing in penny stocks there are some rational and logical factor that one should take into consideration.

Some people decide not to invest in long term securities as it is very difficult to assess right opportunity that can give good returns, on the other hand penny stocks is perfect option for smart investors who wants to make quick gains in stock market. Price of penny stock is very low, so both initial investors and experienced investor can think of buying such stock. If we compare penny stocks with higher priced stock, one can get more numbers of penny stock shares with same amount. This gives more leverage to investor.
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Although penny stocks give best opportunity of financial gains to an investor but nothing is certain in stock market so it is advisable for any investor to do proper analysis with stock screening technology that can help in finding good investment option. This technology tool can help you to monitor up and down fluctuations of stock market. Little changes in stock market can make you more gains.


Judging the right time and getting the exact stock data is very important for investing in penny stocks. By doing proper reach you’ll be able to find that the penny stock you pick can bring you good profits or you may suffer losses. Beware of some stock screeners that provide bogus market readings.

To be successful in fast paced penny stock market, you have to find some reliable source of information to pick right stock for you. These sources have real time information on stock actions.

Essential Facts for Buying Penny Stocks

Penny shares term refers to stocks that are low priced generally under dollar five. Although having significant growth potential, you also have chances of losing your money. You can start with small investment to trade in penny stocks.

If you pick penny stock to make investment, you should know some details of the company that are offering such stocks just like you do investing in other stocks; you need to understand their business plans and nature of business.

Penny stock investment is considered as full risk investment option because these shares are not listed on formal stock exchanges, also companies providing such shares lacks financial transparency. Most of companies issuing such shares are small companies, their value go up and down on the basis of commodity produced. Click here to read more info about penny shares.

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Always keep in mind there is no standard reporting regulation of penny stock companies like other stock companies which are on national stock exchanges. One of its kinds is a pink sheet that simply has no regulation for reporting and accounting.

Due to lack of regulation and information in penny stock trading, such stock can be easily manipulated and even chances of fraud can be more. Some investors intentionally influence the price of penny shares by doing some unethical activities like pump and dump.

Despite of above points, penny stocks always have large potential to make profit. There are various genuine startup companies who issue penny stocks for their initial capital and also have big potential of higher returns. But you need to do thorough research for choosing a right pick. Investors who put their money in strong companies will get huge gains.

Picking right stock is the key for trading penny stocks. Even if you lose money on majority of your penny stocks, don’t worry other penny stocks that you have chosen can recover all your losses.

Quick look on Penny stock trading

If you take advice to some stock investor like how to trade penny stocks, they would suggest you to keep way from this investment option because of risk involved in such small cap shares. This is largely because of there are various fraud companies and scams which use to exist in the penny stock market.

Many of penny stock companies are starting their business that is why this sort of investment considered more risky. Majority of these companies go out of business in matter of days. The chances of business growing rather than failing are very thin. Be clear about your finances before investing in penny stocks like how much you can afford to lose. There some more points you should know like:

• You need to check potential earning capacity of the company that issuing penny stocks, keep a check on financial records of the company, try to find out their competition in the industry. What are the future plans of the company and type of business, this information can help you to ascertain the potential earnings and level of risk.


• After deciding the penny stock company, now you have to decide right time when to purchase penny stocks. It is highly advisable and suggested that before investing money, investor should analyze the market data, should follow market trends and charts. This is the best method in direction of buying quality stock. By doing this practice on regular basis you’ll be able to recognize profitable stocks. To follow this practice you can take help of some reliable sources.

• Knowing exact time to sell penny stock is crucial. You have to be very careful while exit the market and when to sell your penny stocks. By following updated information and watching market trends is the best method to know when to exit market.

Useful tips for Penny Stock trading

Penny stock investment is very risky activity it requires both some skill and some luck to be successful. Some people may belief if you are skilled enough you can take luck factor out of the equation. It depends how you capitalize quality information of penny stocks. The expert penny stock traders take their skills to the level where they can make good trading decisions so that they can make profit on consistent basis.

If you are new to penny stock trading, then it is advisable that you should know the basics of trading penny stocks before investing your money. Once you learned the fundamentals then you can proceed further participating in the penny stock market. But for becoming expert lots of research and knowledge is required, this is not possible in a day or so. Consistent practice can give you that experience. Read more

When you feel that you learned enough, it is the right time for investing. You need to make a plan of actions that outline your goals, so that you can assess your position later on. While making plan, you should determine how much you can invest and how much money you can afford to lose.Useful tips for Penny Stock trading What you are hoping to make profits in terms of returns, what will be your strategy to accomplish such goals. The expert penny stock traders develop their plan in advance before start trading. This is very important to earn good returns from penny stock trading. You also should make a plan before you take any real action.

When you start trading the best tip is to experiment as much as possible, so that you can get some profitable options for you. Don’t give up if you lose your money at initial stage. Try to stay in the game for longer period you certainly make money.