For those wanting to invest in stocks with no high risk, then they have to invest in penny stock. Penny stocks are quick and simple, everyone can do it. It is fun and can give you a serious profit as well.
What are penny stocks?
Penny stocks are those stocks that share that trade for $5.00 each or less. There are many multi-billion dollar companies that are in the penny stock category.
The example of those companies is Ford Motor Company. The company was trading for $1.87 per share after the financial crisis in 2008. The companies categorized as penny stocks are often large corporations on their way up (along with their way up).
These are the stocks mostly listed on major exchanges like the American Stock Exchange and NASDAQ. Yet, some of them are also smaller and riskier stocks traded on “dark” stock markets.
Whenever you want to invest in these stocks, then remember, stay focus on the high-quality companies in the major exchanges and avoid dark markets. That will automatically direct you to a better position to gain profits.
Avoid the potential scams
You may have heard some stories about the scams and frauds in penny stocks. Its thin flow trade and its tiny size give opportunities to dishonest players to manipulate the prices.
Then, the vulnerable people to that scams are those who spend money to get a free stock pick. Usually, those people look for the free stock pick through an online message board, postal mail, or a free newsletter.
They got trapped in by the dishonest hype from a scammer. The scammer recommends them to invest their dollars into a worthless company’s penny stock.
Buying penny stocks that a promoter is talking about is never a good idea. You have to remember, a high-quality company will never need a promoter to drive their stocks to price higher. You have to look for companies which increase in size and price on their own, instead.
Also read: How to Make Good Investment through Stock Trading?