Penny Stocks: Are Penny Stocks Dangerous?

If you’ve heard anything about penny stocks, it’s probably that they’re a bad investment, or an Internet scam. There’s a lot of bad hype out there concerning penny stocks, and the bad rap has made many investors shy away from using penny stocks at are. But, are penny stocks dangerous to investors?

Penny stocks have a bad reputation for a number of reasons, not the least of which is that penny stocks are often used as a part of Internet e-mail scams. Nearly everyone has been exposed to these mails, which claim to offer cheap penny stocks that will bring a large return. But in truth, this is a scam, and will only cause you to lose your money.

This is one of the reasons that many try not to invest in penny stocks. But penny stocks are said to be a “high-risk” investment, which turns many people away from investing as well. After all, the words “high-risk” sound pretty scary…especially when it’s you’re money, right? High-risk means there’s a good potential to lose money, and no one wants that.

There are some advantages to penny stocks, however, and they can bring in a good return. In fact, penny stocks can be incredibly lucrative, and many investors choose to take the risk on penny stocks in hopes of getting a very large profit in the end. With penny stocks, investors often have to act quickly, as penny stocks infrequently trade.

This infrequent trading is one of the reasons that penny stocks are considered to be high-risk investments. It’s hard to sell stock that doesn’t trade very often. In the U.S., the term “penny stocks” is often applied to those publicly-traded shares that do not go through the major stock exchanges (NYSE, NASDAQ, or AMEX, for instance). Trading in an unsure market makes many investors leery of trying penny stocks out for themselves.

But for those who know how to finesse their stocks, penny stocks can bring in a good return, and this is what makes many investors bold enough to try them out. Are they risky? Yes. Are they unsafe? Not really – unless you invest in penny stocks that you find advertises in your e-mail. Don’t trust these spam messages, find your own penny stocks to invest in.

There are plenty of good penny stocks out there to invest in. It’s just a matter of finding them. Check business journals and talk to your stock broker if you have one. These are both good ways to find out about new penny stocks. Penny stocks are often cheaply bought, and in the best-case scenario are then sold for great profit. It’s this hope of a large return that keeps many investors coming back for more, buying more penny stocks, and hoping. When suck a prize awaits, many are willing to take those high risks.

Only you can decide if investing in penny stocks is right for you. Look into the stocks you want to buy before purchase, and make the decision for yourself – not for anyone else. When you decide your own financial fate, you enjoy the returns that much more.

Technorati Tags: , , , , , , , , ,

Penny Stocks: Aren’t All Penny Stocks a Scam?

Most Internet e-mail users have been subject to penny stock scams. There are more than fifty billion spam messages sent each day, and many of these mention investing in penny stocks. Spam isn’t a very reliable investment source, right? Does that mean that all penny stocks are, essentially, some sort of scam?

Penny stock scam is a sad fact of using the Internet. It’s possible for people to lose 8% of their investment when falling for these penny stock scams online. Often, these penny stocks do not exist or they do not exist at the advertised price. This type of scam is called a “pump and dump.” Yes, there are some scams on the Internet that center around penny stocks.

This does not mean that all penny stocks are a scam, or even a bad investment. There are some penny stocks that can make investors a good amount of profit, in fact…just not the ones you find advertised in spam. Stopping yourself from investing in those penny stocks is a great idea, but deciding never to invest in penny stocks of any kinds because of that may not be.

Yes, there are considered a high-risk investment, but it’s also possible to turn a pretty profit by using penny stocks. In most cases, there is a certain finesse needed to invest in these stocks, as they rarely trade and sometimes things happen with penny stocks very quickly. Investors have to know what’s happening all the time and be ready to make a move when needed – making penny stocks somewhat exciting and interesting to trade in. This is why some investors like them.

Don’t let Internet scams scare you away. There are a lot of Internet job scams, too, where so-called “employers” offer to pay you lots of money to do something simple like answer surveys or surf the “Net. In many cases, these “job offers” turn out to be nothing but an Internet scam, and a clever ploy to try and get your hard-earned money. But you don’t let Internet job scams keep you from working – so don’t let Internet penny stock scams keep you from investing. That still means that the scam artists win, because they’re keeping you away from something.

To learn which penny stocks are potentially good investments and which are potentially bad, there’s lots you can do. Check the business journals and stock information, or ask a broker for more information and advice regarding penny stocks. There are good penny stocks out there, and there are investments out there where you can make a lot of money. By doing your research and looking into every possibility, you increase your chances of success in the stock market. And isn’t success what it’s all about?

If you’re interested in investing in penny stocks, you can’t let anything (even scams) stop you. Do what you want to do and invest your money where you think it’s best. After all, it’s your money and only you can decide what you want to do with it. Make the choice for you, not for any other reason.

Technorati Tags: , , , , , , , , ,