penny stocks 2012

04/13/2012 20:19

Penny stocks (also known as cent stocks in some countries) have varying definitions. While some believe them to be companies that trade stocks for pennies or less than $5, others consider any stock trading to the market at less than $1 as penny stocks. However, there are some typical properties of these stocks that are established. Basically they are the shares of a small company that are not easily converted into cash and involve a high risk of loss (i.e. speculative).Is Investing in Stocks The Right Thing For You?The major question that arises is that if by definition, penny stocks have a high risk, then why invest in them? The major upside of this is the ability to turn a small investment into a fortune. Also, it is a great way of learning about the stock market. However, there are many risks that are present when trading and it is essential to know them. One of the major risks is fraud and spam; it is important to know that you should never buy stocks from any source which you are not sure is reliable or not. Therefore it is essential to get leads about great penny stock companies from brokers or market specialists. Also it is better to focus on higher volume these stocks, or those with greater investor interest. Thus it is crucial to buy stocks from an authentic source.How to Buy Penny Stocks?The first thing you need to trade any investment whatsoever is a brokerage account. A brokerage account is an investment account opened by a buyer (i.e. you) of securities with a company that trades in buying and selling of stocks. In order to do this, you simply need to contact a brokerage service and open an account with them, and then you can buy and sell stocks. They will walk you through the simple processes of getting started. There are also several websites available that gives you rankings of the best brokers (a person who buys and sells goods or assets for others) that are available and that can make you decide which broker you want to work with. Careful precautions need to be taken in order to ensure that you are dealing with an authentic, reliable broker. Once done that, it is easy to find penny stocks with any stock screening software. It is also possible to get professional help about making money from stock trading as well as reading information on an online newsletter.Now all that is left is for you to decide on how much you need to invest. If all these simple steps are done correctly, you should soon be getting profits on your investments.   Find more at penny stocks 2012