A Beginner's Guide to Investing With Penny Stocks

Posted on: June 17, 2013
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Penny stock investing has proven to be an affordable way for many investors to take advantage of the stock market. These kinds of stocks have become a favorite among even beginning investors who have limited financial resources when starting out. Getting involved in the stock market is a great way to start a career in investing. When you are just starting out, penny stocks due to their low cost can be quite advantageous. There are many penny stocks out there and because they trade so low (under $5.00 a share) it’s easier to buy them than blue chip stocks.

Penny stocks can move huge percentage gains sometimes in just one day. It is not uncommon for some penny stocks to move 50% or higher in just one trading session. The benefits of penny stock investing include:

1. Low start up. Inexperienced investors who don’t have a lot of money can purchase these low priced stocks.

2. Penny stocks are easy to buy. There are many penny stocks in the market and information regarding them can be easy to find.

3. The low cost of penny stocks allows you to buy more shares, thus hopefully making your profits bigger.

4. Their low cost can allow you to diversify your portfolio and put your money into different ones.

5. Penny stocks allow you to get involved with new companies that are trying to grow and become big.

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