Penny Stocks Yes or No
Have you ever
wondered how the men from wall street, make money out of selling and buying from nothing? They actually do not invent and make anything. What they do is make tons of money by helping out companies increase their capital inflow.
That’s where IPO’s (Initial Public Offering) come from. So what are IPO’s? When a certain company is cash strapped they tend to sell parts of their company’s assets as IPOs to the public for added capitalization.
Investing to something is a high risk, businesses, company and stocks investors are riskier because it not only includes money but billions of money and pride and honor were also at stake. Company will enter in trading some stocks to fill in the stocks they needed for their company to continue its work and to grow more. The movement in the stock markets will affect the movements of the company and many investors as well. If their company capital is lower they will refer to as a company will small cap stock, and they will find small cap investor to help them in their company. The small cap investor relation for small cap company will enjoy less selling coverage and will had a strong hold on its time and resources.
A company often enter into a penny stocks wherein they trade their shares in a low price. It may not a good strategy to enter because it is very high risk to invest. This may lead to manipulation of stock promoters. It will also make it to easily lose money. It is gambling your own stocks in investing in a risky company. In buying penny stocks make sure you research and investigate that company before buying stocks. Penny stocks is investing to a risky company that might do well or not hence that it has a low price or profit but it is very high risk.
As you invest your money to buy stocks to a certain company you will have now what we called investor relations. It is a communication between company and you as an investor. This is being managed by who we call public relation officer to report the relation of the company to the investor. Through this information will be transmitted like company’s policy or social responsibility will be available.
Investing must really a very successful strategic moves because of its stakes, somehow people in the stock market strategies themselves to earn more in buying company’s stocks. There are investor relation firms that will help in terms of managing finance, marketing, communication, securities law with the relation of the company to the public financial community.
They will be the one to make interviews, identify the mission of the company to give awareness about the current situations in the stock market and investment. They will provide social media relations, media relations for the client and company’s good communication. It is a must to be aware of current situation of the stock market before investing, it is a must to be aware of economic situations before entering to investing, you must also have had a background about the company’s stock you want to enter because it will make or break you as an investor. There are firms that will help you with that, it will make you more aware, more knowledgeable that will lead you to strategize and make a move before investing to something. Ask the firms references, insights and outputs about investing to help you big time.
You may visit the site positivestocks.com to know more, learn more and ask for more.
How to invest in Penny stocks?
In this article we are going to talk about the Penny Stocks , a very popular type of stock due to its enormous volatility , which can reach high returns in a short time but, in turn, have a high risk.
How to invest in penny stocks
Are called Penny Stocks to shares of companies operating small market capitalization at low prices (less than $ 5) generally OTC ( “over the counter” , also known as OTC markets ). These assets are generally considered as high risk and speculative, due to their low liquidity, large spread between the purchase price and the sale and low capitalization.
The rating of the Penny Stocks as such is determined by the price of the stock, not by the market capitalization of the issuing company. However, companies that issue penny stocks generally have market capitalizations of less than 500 million dollars.
These actions are highly prized by traders who are dedicated to speculating with horse mackerels , since their great volatility shortens the duration of the strategies. Think that in an action of less than a dollar, each movement of a penny is an important percentage of surplus value.
Types of Penny Stocks
There are three types of penny stocks , they are classified according to their risk, to the controls on them and to the OTC market in which they quote:
OTC Pink : these are the lowest-quality and the most speculative stocks, coming from bankrupt companies or with serious liquidity and financing difficulties, or from companies that still do not have products in the market. When dealing with companies that do not fulfill the necessary requirements to quote, they have no obligation to publish information and they are not audited.
types penny stocks otc pink
OTCQB: These actions are in the medium level of risk. Unlike OTC Pink, the companies from which these actions come are obliged to present documents and accounts publicly. Even so, they are still dealing with very small companies or in an initial phase of development and it is difficult for investors to predict if these will end up being viable projects.
penny stocks otcqx types
OTCQX : The companies of which these shares are part, within the risk that they continue to carry, comply with many of the financial standards, are obliged to present documents and accounts and are usually audited, so they offer greater security for investors. Sometimes they are companies “sponsored” by other companies or large investors who bet on their future. However, the probability of success when investing in one of these companies, even if it is low, is much higher than choosing the two previous options …
How to invest in Penny Stocks?
Normally, there are few brokers that offer to operate in penny stock markets , which do so at very high commissions and with value restrictions.
Therefore, the most recommended and common way to operate this type of stock is through online brokers , who offer the service of trading shares over the Internet.
If you need more information about brokers and the commissions they charge, you can consult the following link: TD AMERITRADE
Benefits and risks of investing in Penny Stocks
The main advantage of the Penny Stocks is that they are stocks with values so low that any impulse in the price, even if it is not very large, can provide a large surplus value in a very short time. Sometimes the Penny Stocks have managed to double or triple their price in a single trading day.
So if we analyze a company, we understand the sector in which it operates and we see that they are carrying out coherent actions we might be able to detect a great investment opportunity.
However, the truth is that it is very difficult to detect these investment opportunities with penny stocks and the risks that we face when investing in them are high.
First of all, the biggest danger of investing in Penny Stocks is the lack of information and transparency about the companies, which makes their analysis very complicated, which makes it very difficult to know which to invest in and when to do it.
Furthermore, this lack of transparency makes it possible to manipulate prices or information, which could be detrimental to small investors.
Finally, we must not forget that having so little liquidity, we can be trapped in a price almost without counterpart, even if we are in profits it is likely that it will cost us to sell our shares with a good margin.
In short, a penny stock is not a recommended action for anyone, but for those investors who understand the matter and know the risks involved in investing in shares of low market capitalization and low liquidity.
If even with this, you dare to invest in these types of actions, experts recommend that the investment does not exceed 5% of your total assets allocated to financial investments and, above all, that you always have a disciplined stop loss strategy .
Once you have known the characteristics and risks of the Penny Stocks, would you invest in these types of actions? Would you assume high risks in exchange for the possibility of generating large profits? Leave us your opinion…
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How to invest in penny stocks.
Making an investment in the best penny stocks regularly takes due research by financiers and staying on top of market trends as well as a stocks basics and technical’s as well as other things. Financiers can use a stock screener to get a list of stocks that fit their factors. A stock screener permits speculators to screen stocks in the market through a spread of factors like price, cap, market, beta, profit, money, price to revenues proportion and price to sales.
Speculators must then research the basics of the stocks in the list as well as each chart and the news out of each company to develop an understanding of the corporations in the list. Speculators should always recall that securities investing is dodgy and financiers shouldn’t ever invest in the stock market unless they can stand to lose their complete investment. A lot of sites provide the best penny stocks newsletter that alerts speculators to new stock concepts.
There are speculators who day trade the best penny stocks out there in the trading day as certain stocks become hot and interest peaks in them. It is vital for backers to read the news every day and keep on top of the market. It’s critical for financiers to become financially literate, this suggests among other stuff, studying how to read revenue statement, balance sheet and money flow statement to grasp the elementals behind corporations.
Each financier and trader must discover their own risk toleration. There’s a serious amount of info flowing through the market every day. There are a few major exchanges in America and others around the globe. Those that consistently find the best penny stocks can earn quite the profit. There are large cap and small caps as well as nano cap stocks in the market. Learn How to Invest in Penny Stocks.
Timing the market can be of the uttermost important. Stocks are moving continually and investors need to spot when the stock may move down or up and investigate the stock chart of each stock being investigated. Backers should stay recent by reading a selection of books on the stock exchange and reading business reports as well as worldwide stories.
The market is a hot subject around the world. The stock exchange is critical for corporations to raise cash to grow their operations and grow. Financier experience is necessary to identify the best penny stocks and keep a lid on of the trends in the stock exchanges. Also, there are industry’s that are hot at set times and potentially cold at different times.
Getting high profits is what attracts all of us into this field of investment. On the contrary before pouring all of your hard earned money into buying the shares of any business, make all of the essential inquiries and look into the fortunes of all of the corporations that you are interested in that are accessible for investment. It might be best to invest in a company that has excellent returns and is going to have a stable position above an interval of time.
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