| Penny stocks are shares that can be traded starting | | | | It is important to keep in mind when considering |
| at any amount that is less than $5. If a company's | | | | penny stocks investing that all the major companies |
| total value or market capitalization is less than $10 | | | | such as Walmart, Xerox, etc, used to be penny |
| million, it may be called a penny stock company. This | | | | stocks at one point that investors took a chance on |
| article discusses whether penny stocks are worth | | | | and benefited. As they grew, the stock price |
| adding to your investment portfolio. | | | | increased until the stockholders became |
| They are usually riskier than average investments | | | | multi-millionaires. |
| and if your portfolio and your investment strategy is | | | | Additional Risks Involved |
| risk aversion, you do not need to include these | | | | 1. Do not purchase any stocks that you heard about |
| stocks in your portfolio. Because they are much | | | | for free. Swindlers usually use pump and dump |
| riskier than other investments, the reward potential is | | | | techniques to scam you out of money. They will tout |
| significant. | | | | a certain stock with no supporting basis besides their |
| Some of these stocks have gone from $.25 cents to | | | | word and once enough investors purchase the stock |
| $30.00 while there are other penny stocks have | | | | and inflate the price, they will usually disappear during |
| become worthless. If you are in your twenties or | | | | the night after selling their stock at grossly inflated |
| thirties and have a longer time before retirement, | | | | prices. |
| you can probably stomach more risk and implement | | | | 2. If investors do not do their own research or how |
| an aggressive investment strategy and try your hand | | | | to trade in these stocks. |
| at investing in these stocks, compared to someone | | | | 3. Penny stocks may have low visibility and may not |
| with less time until retirement who may be advised | | | | be easily traded. |
| to make conservative investment choices. | | | | If you take the time to perform proper research on |
| A lot of investors like these investments because of | | | | the companies and learn how to trade in penny |
| the small cost related to trading in these investments. | | | | stocks, it will pay off in your investment portfolio for |
| It is hard to invest in Walmart or Microsoft currently | | | | years to come because trading in penny stocks is a |
| and make a significant profit. If you purchased | | | | very rewarding and exciting investment opportunity. |
| Walmart stock in the seventies that you still hold, | | | | If you take the time to learn how to find good |
| then your investment return currently is extremely | | | | companies that are offering these stocks and take |
| significant. | | | | the time to understand the dangers and the ways to |
| There are plenty of small companies across the US | | | | avoid them, you can be one of the next |
| that have the potential for significant growth in the | | | | multimillionaires. The recession makes this an |
| future or that can crash and burn. You have the | | | | opportune time to make a change and look for viable |
| ability to turn a small investment into a fortune when | | | | opportunities for success. There shall not be an |
| you invest in these companies that significantly grow | | | | opportunity like this for many years so you need to |
| in the future. The downside is that you will lose your | | | | take advantage. |
| entire investment if the business does not succeed. | | | | |