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Thursday, July 23, 2009

Penny Stocks - Are They Too Risky?

By Marco Davies

We all know the term 'high-risk investment' often sounds frightening, and frequently this set phrase alone is enough to put a good many savers off - because at the end of the day no one wants to take a chance. The difficulty with obtaining any sort of stock (high-risk or not) is that it's invariably a risk.

On that point is a lot of info swimming around on the World Wide Web about penny stocks. Nearly everybody with e-mail has gotten junk e-mail at some time, boasting about them as the next fantastic investment funds. Unfortunately, much of this information is geared toward scamming you in some sort or another, and it is in all likelihood that you will lose your money that you put into the stocks advertised in this manner. This doesn't necessarily follow that every penny stocks will be poor deals, or that every individual investment fund is a scam, as a matter of fact, far from it because some could be very profitable.

Penny stocks are affordably valued stocks or shares in companies or business enterprises that are thought of "small," as opposed to large corporations. There are not that many shareholders involved, making them less 'fluid' than many other varieties of stock. The object of speculating in penny stocks it to spend only a tiny amount of money in the beginning to savor a big return subsequently, but does it work this way? It does, now and again, just not regularly but for people who know what they're doing when they invest, they can be a great investment funds instrument. Dominating the art of dealing in penny stocks can be awkward, nonetheless.

Basically, penny stocks do not deal on the major stock markets, instead, they are referred to as "over the counter" investments, listed on Pink Sheets and the OTCBB. This makes them rather unique, and frequently more difficult to locate for a good many speculators. Penny shares also don't trade very regularly, so now and again investors have very little time to to do something. As trading does not happen frequently, there is always the fear of being incapable to sell one's shares and winding up with a bad investment. This is all part of the risk of dealing in penny stocks, and a good many investors think this makes the game all the more intriguing. When you commit, you should receive monthly updates that make you aware how your stock is doing.

Many investors consider penny stocks too unsafe but the only individual who can determine that is you. It's all down to how much gambling with your funds you wish to do, just how much you are aware penny stocks, and how fortunate you feel. If you imagine speculating your money in penny stocks is a good idea, then it probably is but everyone has a different thought so study them, and form your own views. - 23208

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