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.