| New stock market participants are often attracted | | | | offer the rate of return that small cap start-up |
| to the potentially massive gains that can be attained | | | | companies present to investors. |
| when investing in OTCBB penny stocks, but are | | | | The key to finding these opportunities lies with the |
| often left with a depleted brokerage account | | | | individual investor, not with hype newsletters or paid |
| wondering where they went wrong. Ill prepared and | | | | touts. Seeking out and finding companies trading on |
| lacking knowledge where market dynamics are | | | | the OTCBB that have the potential to one day |
| concerned, novice penny stock investors frequently | | | | become huge gainers takes a dedication to research. |
| fall prey to undercurrents that indirectly affect the | | | | Learning to read stock charts is a skill that all stock |
| markets. | | | | market participants must eventually learn. Stock |
| These undercurrents usually take form in the shape | | | | charts are the bedrock of technical analysis that |
| of pump and dump schemes, financial message board | | | | provide information that can determine entry and exit |
| hype and newsletter touts, all hoping to entice | | | | points as well as support and resistance levels which |
| investors into stocks that have little or no chance of | | | | are all important parts of technical analysis. |
| ever becoming anything other than a vehicle to sell | | | | Investors that rely solely on technical analysis can be |
| stock to an unsuspecting public. However, these | | | | successful investing on the larger exchanges such as |
| market leeches do serve one purpose: Once a new | | | | the NYSE and NASDAQ, but will very often struggle |
| investor is bitten, they will be twice shy about taking | | | | with success without a foundation in fundamentals |
| unsolicited advice at face value and will often be | | | | when investing on the OTCBB. Penny stocks are |
| prompted to better educate themselves about | | | | prone to trade infrequently unless there is a going |
| penny stock investing. | | | | concern fundamentally that gives investors a reason |
| There is no question about the risk involved when | | | | to invest in them. Usually, these going concerns are |
| investing in penny stocks. However, stocks trading | | | | the possibility of a product coming to market or a |
| on the Over The Counter Bulletin Board exchange do | | | | patent has been issued. One very strong going |
| offer an opportunity to those investors that have a | | | | concern is the possibility of a buy-out by a larger |
| tolerance for risky and very speculative investments. | | | | more established company. |
| Very few investment opportunities exist that can | | | | |