Penny stocks are small company stocks quoted at very low price per share. These stocks are found in abundance being traded on stock market. These are very risky trades for traders as well as for investors. The success ratio of these penny stocks to become a gem is quite low. On an average only couple of stocks out of hundred turned to become a gem and rest just a loss making proposition for investor.
To pick a good penny stock out of a lot is a major consideration and there are lots of queries by masses regarding a good penny stock.
The major FAQ (frequently asked questions) regarding a good penny stocks are as below;
- Is Good Penny Stock hard to Find: Unlike the big stocks, penny stocks movement is not correlated to the market conditions, So they have a different system of evaluation. For finding a good penny stock, it is prerequisite to have a system that shows reliable stocks. Majority of penny stocks news are fraudulent and misleading for investors. Being cautious to this flow of information and a better system makes an easy judgment for a good penny stock. It is easy to make profits out of a good penny stock but a real difficult task to find out than gem.
- Can Penny Stock make Investor Rich: There is a general miss conception among people that penny stocks will be a blue chip in future and a definite source to become rich. In reality not all penny stocks show growth. Majority of them fail or even can get de listed and turn whole investment into zero. Although they have a potential to give massive gains in very short period and can make you rich, but only a few belongs to a good category like this.
Some more FAQ’s regarding the penny stocks are as below:
- Should all Investors invest in Good Penny Stocks: Investor investing into penny stocks, although a good penny stock needs patience and risk attribute. Not all people are advised to invest or trade into these small company stocks. They are risky due to their huge price fluctuations and are easily prone to scams by big brokerage firms. Investor also need patience to trade into these stocks, as huge gains into these stocks comes with passage of time. Penny stocks may for years get ignored as big buying houses, slowly accumulate the stock over a period and then start making it rise. The price rise may be swift but don’t know when it will come.
- Best System to use for Finding Good Penny Stock: This is the most frequently asked question on blogs about the penny stock. As the profits from can be huge, so people are crazy investing into these stocks to make huge money in no time. There are lots of tools available to find a good penny stock but most of them are misleading. The best system can be the paid premium newsletters, paid research report from analysts and paid stock tips etc. It need to assessed that the source chosen must be authentic and history of producing winners.
- Do you need lot of money to trade into Penny Stocks: People feel like that more money is made from huge investment. This is not true in case of penny stocks. More money can be made from these small company stocks with little money. The penny stocks are low priced stocks, so more shares can be bought with less investment. The stock price movement in penny stock can be so large that it can get double or even triple in just couple of months.