Penny Stock Picks Guide

To gain from the investments in VERY CHEAP STOCKS, which alone is an extremely dicey investment option, you ought to be very careful in what to choose and what things to avoid. VERY CHEAP STOCKS which boasts of converting small capital into big fortunes are primarily those publicly traded stocks which are presently trading under $5 per share. They attract both traders along with longterm investors due to the little bit of capital necessary to make substantial gains.

Most of the VERY CHEAP STOCKS are traded on NASDAQ, Pink Sheets or on the Over-the-counter Bulletin boards. However, the Penny Stock companies shouldn't be considered inferior in virtually any sense to those traded on major exchanges. Actually, most of them have better growth rates than a few of the NYSE stocks and promise handsome returns on petty investments. Yet, you must do your homework and gain understanding of these businesses to benefit from them. Penny Stock picking sites and bulletin boards often assist traders to find emerging companies but getting influenced merely by the impression developed by these sites and getting entangled in to the hype generated by the telephone salesmen or professional promoters hired by some companies because of this job specifically, can result in disastrous consequences.

As a wise trader it is best to avoid those penny stock picking sites designed to use false advertising and misleading statements which project unrealistic gains, such as for example, "this stock will rise 10000%" or "this is actually the greatest company ever". Some sites even project a false history of these successful penny stock picks. Also, disregard the sites and advertisements that use appealing words like "guaranteed", "for a restricted time", "we've insider information", etc. Those VERY CHEAP STOCKS, which guarantee good returns usually never, succeed. This sort of false propaganda may also be witnessed in bulletin boards and boards. Generally this hype is established by novice traders wanting to make their stocks rise or by the paid representatives of the firms making misleading statements to keep the purchase price per share higher as the company dilutes. Thus, it is suggested that you ought to personally collect all the details about these stocks from reliable resources and really should spend money on them only when you personally believe that they are an excellent investment.

Investing in tumbling VERY CHEAP STOCKS in the anticipation of gaining later when these stocks begins performing well also needs to be avoided, as much of these never recoil. Moreover, it's also advisable to ignore those companies that take part in low volume trade and the ones that offer you stocks without charging any commission. Because it'll be very difficult so that you can buy or sell those VERY CHEAP STOCKS which trade in low volume, at desirable prices; and the commission free stocks are as a matter of known fact, never commission free, as these businesses charge their invisible commission either by selling you their stocks at an arbitrary amount or at price tag instead of at bid price.

Hence, you need to apply your personal diligence rather than get influenced by the false hype and propaganda, and pick those very cheap stocks, that may really convert your pennies into a lot of money.