If you do not have much money and you want to invest in stock, should consider penny stocks. Penny stocks are a very cheap kind of stock and this makes it possible for as many people as possible to invest into it. Anyone who does not have enough money to pump into any of the giant stocks can always look up a penny stock to invest into. Many individuals are already getting involved in it and they are also making something tangible out of it. Several negative opinions had already been voiced out about this form of investment. But this has never stopped those who are making money out of it from carting away profits. You too should take the risk and join the bandwagon; you too may end up smiling to the bank through penny stock.
Some tidbits
Penny stock does not cost much to invest in. In fact, it does not cost you more than about $5 to invest into it. There are several penny stocks out there that do not even cost up to $5. This does not in any way mean that you will not be able to make considerable profit when you invest into it. The companies that are offering penny stocks have net worth up to $5 million. There are also some other companies that may not have such worth. Any company with a higher net worth than $5 million does not belong to the group in penny stock. The limited worth of such companies does not in anyway affect the profitability of the penny stock you buy from them.
A company requires more than just $5 million to become part of the official stock exchange. Aside the issue of money, there are other requirements that a company needs to meet before it can be accepted as part of the stock exchange. If a company can?t meet up with the requirements, it is automatically counted among the companies under penny stock. This should not in anyway be seen as any limitation on the affected company. Investing in them does not in anyway mean that you will not be able to make something tangible out of your investment at the end of the day.
The United States Securities and Exchange Commission actually takes lots of interest in the penny worth companies. Regulations are made available to be followed by these companies and any company that does not follow such regulations are generally tagged by the SEC. this will give any investor the red light so that he or she will not make the mistake of investing in such a stock. Any investor that invests with such a company will do so at his or her own risk.
The intervention of the SEC actually turns the penny stock to a secure penny stock. This ensures that your investment will never be tampered with for any reason; with the strong arm of the SEC, you can sleep with you two eyes closed after you must have invested into the penny stock made available by that company.
As part of the moves of the SEC to make the penny stock as secured as possible, it makes it a point of must for companies offering penny stock to carry their clients long. Every broker is also instructed to make a statement available to their clients. The statement is expected to guide the client on how profitable or otherwise any particular penny stock will be for them. The statement will also enlighten the client on how risky the investment he is about to make is. Any decision that the client makes based on the statement offered by the broker is then a complete responsibility of the client in question. But the broker is under compulsion to ensure that the information is complete and plain enough.
This move by the SEC turns the penny stock to a secured investment. It removes the possibility of any company trying to rob you of your hard earned money. Any broker will not be able to take advantage of your lack of information. The move actually makes information available to you and you may be as informed as the broker himself. This will make it easy for you to invest without much worry.
The issue of secure penny stocks needs to be closely looked into. The regulations of the SEC on the companies do not actually give a complete reliability in your investment into penny stock. Penny stock investment is still very risky. Many of the companies involved in it are newly registered companies. Do not forget that their financial basis is not higher than $5 million. This means that the company may not have strong financial backbone to bear any financial problem. The amount such companies charge per share is also not more than $5. Some companies actually charge less than this. You need to put all these factors into consideration before you venture into penny stocks.
Many of the companies in penny stock are lightly regulated by the SEC. This may affect the security of your investment. Such a thing can also mean that you may lose all your investment after you have invested into any of the companies under penny stock. When you are dealing with any stockbroker, you should carefully look into the information the stockbroker is presenting to you. If the stockbroker tells you only the sweet part of penny stock and only about secure penny stock, you need to be wary of such a stockbroker. A stockbroker that is plain completely will tell you the truth of the whole thing. He will not hesitate to make all the risks known to you. You can put you trust in such a stockbroker.
Conclusion
Penny stocks do appreciate in value. But in most cases, they rarely appreciate as much as larger stocks. Any company among the penny stock companies should never be expected to give you a high yield of your investment. This situation is highly affected by the capital base of the company and the amount you are investing, so arm yourself with the right information and the right broker before embarking on this investment opportunity.
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Source: http://www.pennystocks123.com/penny-stocks/secure-penny-stocks.html
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