As others have written above, penny stocks are very risky and be prepared to lose any investment. There are those who post on bulletin boards promoting certain stocks in an attempt to manipulate share prices. You invariably lose. I'm not saying don't play with pennies, but if you do, do so with eyes wide open. Take an adult evening school or community college or public library course on learning to invest. Look at some of the neutral web sites, visit some of the larger brokerage houses with storefronts in your area, and read. The larger firms including (but not limited to) Fidelity, Schwab, Scottrade, and TD Ameritrade all have brick and mortar storefronts in addition to investing web sites. Find your area brokers by searching within Google/Yahoo/Bing the phrase "stock brokers near me" and/or "stock brokers in <city>" and follow the yellow brick road. IMHO, if available to you, other options to begin investing are to fully fund your employer's pension plan, retirement plan or payroll savings plan. Tax savings may be significant. Your personnel department may have resources to shed light on various options. Otherwise, open an appropriate IRA, fully fund it and dollar-average in a few selected stocks that have a decent cash flow and pay dividends.
If I were you I would start with understanding the blue stocks, buy a few, lose a bit of money there first etc before even thinking about penny stocks. It's like graduating up the risk chain. Blue chips don't fully represent the penny stock space as they are far more transparent, the stocks are far more liquid and they tend to have more consistent earnings profiles. But at least you'll get to understand how the market works a bit more. Watch a bit of financial TV and read some of the classic investment books.
I think that nearly all people who are new to investing, will look at penny stocks first, simply because of the name. Penny stocks sounds like it's not going to make you too much money, but more importantly your not going to lose a lot either. I think that last part is the main point you look at when your first learning the ropes.
I needed some advice also on penny stocks and I don't mind taking risks but I will keep doing my research and keep these suggestions in mind also.
Take your time, read, but this isn't what you should do neverendingly, meaning making it counterproductive. Take action, too. If you expect not to lose any money at all in the process, you're going to find yourself stuck in this, without a lot of money into your pocket. Even if it's called "penny stocks", trust me... if you don't know your stuff, you won't reach far. I'm talking from the perspective of one who got burned pretty bad in the past.
So let's say I have some "fun" money. Money others might use to take their partner out to dinner, buy some toys and gadgets ect. But I want to put it into the penny stock market. So I am "new" to PS's. Do you look for the same fundamental/technical data? Is their some numbers or some quality that could be an indication of a valuable budding company?
Same fundamentals - healthy volume, institutional interest, unique or innovative products or services, preferably strong revenue growth, etc. Some earnings and margin expansion would also be nice. The bottom line for me if I'm going to invest a few bucks in a low priced stock is that there needs to be some information available from reputable third party sources about the company. For example, if they're a biotech company, do they have a promising drug or pipeline that makes me want to speculate on them with a few bucks? Or if they're an energy company, are they drilling in a good spot or developing some sort of realistically viable alt energy source, and do they have access to enough $ to likely be able to complete the projects?
I am very new to the idea of stocks on a whole and penny stocks. Based on what I'm seeing it seems to me that penny stocks are for those who may be just starting out and want to start small. I would definitely want to know more though because I've also come across concerns about the feasibility of penny stocks. It seems for any stock that you're investing in, you need to do as much research as possible and also invest time.
FWIW did you see my message #21 above? Walking off an unknown cliff into the penny stocks is more than likely a sure way to lose your principal and discourage you from building wealth in the future.
Yeah, even if you've only got $100-200 or so, it's better to put that into an index fund, or perhaps into one share each of several different stocks trading above $10 a share than to put that $100-200 into one or more stocks trading under $1 a share. The risk of permanent loss is much, much higher with stocks trading below $1.
