How To Start Investing In Penny Stocks

Penny stocks are described as stocks whose value is below $5. These stocks are highly speculative and high-risk stocks, but they are also very attractive for the beginners because of the low value. Penny stocks can not be found on the stock exchanges (NYSE, NASDAQ) and they are commonly sold through the method called over the counter. The value of the penny stocks as we said is very low and you can find such stocks on the market for the price of few cents.

Penny stocks are recommended for the beginners who are taking their first steps in the share-market investments. Yes, they are high-risk stocks and you can loose money by investing in it but if it so you will loose only a small amount. And not every penny stock offered on the market is risky. You can make some profit by investing in such stocks but you should not expect that by investing in penny stocks you will become rich.

If you are interested in buying penny stocks the best way is to find a broker. You have to write a letter of interest in buying such stocks. This rule becomes from SEC (Securities and Exchange Commission of United States) in order to protect your interest. You should agree with the broker about the provision and also the market rate of the penny stocks.

If you have found some penny stocks on the market you can ask your broker to give you his independent opinion of them. He also can give you some recommendations for purchasing some of the penny stocks on the market. Also you are advised to talk with your broker about everything since it is in your best interest to do so. When you have bought penny stocks the broker is obliged to give you monthly statements about the status of your stocks.

The broker can help you a lot when you are interested in investing in penny stocks. How to choose the right broker? The best way is to contact the SEC division of your state which will provide you with information abut the rating of the broker. It will give you information about the license of brokers available and some disciplinary actions against the brokers.

Also all brokerage firms have SIPC (Securities Investor Protection Corporation) which is important when one of them bankrupt. Then all your dues are paid to you by SIPC. This is some type of insurance on your investment. So if you are interested in buying penny stocks you are advised to take on a broker insured through SIPC.

As with all forms of stock market investing, there is an element of risk when buying penny stocks. However, the amount you lose is usually less, so it is a good way to learn the ins and outs of trading stocks.

Riverside Company to be traded on over-the-counter markets (The Desert Sun)

Shares of Riverside-based Fleetwood Enterprises Inc., one of the the nation's largest recreational vehicle manufacturers, will be traded on over-the-counter markets beginning Monday, following its de-listing by the New York Stock Exchange.

7 ways to shortlist the right stocks (rediff.com)

In the sea of stocks that are flooding the market, choosing the stock that works best for you is very difficult. Here are a few points that could help you narrow down your search.

Earnings Preview for Jan 5 - 9 (Zacks.com via Yahoo! Finance)

Earnings and employment will greet traders. Reporting S&P 500 companies include BBBY, CVX, KBH, MON and STZ.

Businesses Cashing in on New Year's (WSAZ NewsChannel 3 West Virginia)

Ushering in the New Year is a big money-maker for a lot of businesses.

Needham Briefs (Jan. 1) (Needham Times)

Your RTS sticker expired Dec. 31. Application forms were mailed to all current sticker holders. Purchase stickers at the Treasurer’s Office at Town Hall, Monday through Friday, from 9 a.m.-5 p.m.