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Wednesday, July 29, 2009

Penny Stocks - Are They Too Risky?

By Marco Davies

The expression 'high-risk investment' often sounds alarming, and frequently this phrase on its own is sufficient enough to put a good many investors off - because at the end of the day few savers wish to take the risk. The concern with purchasing any form of stock (high-risk or not) is that it is invariably a gamble.

In that respect is a lot of data swimming around on the World Wide Web regarding penny stocks. Virtually everyone with e-mail has gotten spam at some point, boasting about them as the next fantastic investment. Regrettably, much of this data is geared toward victimizing you in some sort or another, and it is likely that you will lose all of the money that you placed into the stocks and shares promoted in this way. This doesn't necessarily follow that all penny stocks are raw trades, or that every single investment is a con, in fact, far from it as some may be very profitable.

Penny stocks are affordably priced stocks in companies or commercial enterprises that are believed "small," when viewed in relation to large corporations. There aren't many shareholders concerned, making them less 'fluid' than a great many other kinds of stock. The goal of speculating in penny stocks it to part with very little money initially to enjoy a big return later on, but does it happen this way? It does, sometimes, just not constantly but for individuals who are aware what they are doing when they're investing, they can be a fantastic investment funds instrument. Controlling the art of dealing in penny stocks can be delicate, nevertheless.

For one thing, penny stocks do not deal on the ranking stock markets, instead, they are referred to as 'over the counter' or OTC investments, listed on Pink Sheets and the OTCBB. This makes them rather unique, and often harder to find for a great many investors. Penny stocks also don't trade very frequently, so sometimes investors do not have much time to to do something. As dealing does not happen regularly, there is always the fear of being incapable to sell one's shares and landing up with a poor investment funds. This is part of the challenge of dealing in penny stocks, and a great many speculators believe this makes the gamble all the more exciting. Whenever you save, you ought to get monthly updates that inform you of how well your stock is preforming.

Some people consider penny stocks too risky but the only person who can determine that is you. It's all a question of how much gambling with your funds you desire to do, just how much you are aware penny stocks, and how fortunate you feel. If you believe investing your money in penny stocks is a respectable idea, then it probably is but everybody has a different view so study them, and create your own views. - 23305

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