I think it's very important to "consider the source" when it comes to info. I only take it seriously if it comes from a respectable and reputable website, publication, governing body, or perhaps a respected professional. Then I'll look at it all and make a decision from there.
Same here... well nearly. Respected professional first... reputable publication, yes. I'm still a little shaky about "respectable website" because I've seen too many of those totally fold and lose respect in a short time in the many years I've been online. When it comes to investing, and especially the stock market, I can't imagine anyone *not* considering the source when there are so many reports constantly of someone trying to make a quick buck at the expense of investors.
You raise a lot of good points Kate. You just never know what is going to happen. People see it as a chance to get rick quick. They forget they can go broke even quicker normally
Well, you've got to look for FACTS and not so much "opinions", and if you go to sites like morningstar, WSJ, marketwatch, fox business, CNBC, etc., you know that they are reporting accurate info on things like company earnings and filings, etc. And if they report something that is not accurate, they make a retraction. They do also report some rumors as well, and you should either: 1) know how to trade on rumors with no more money than you can afford to lose if you happen to botch the trade; or 2) stay the hell away from it, which is probably a better thing for most people to do. And you have to be careful to differentiate facts from opinions. If the opinion is coming from an investor who has averaged 20% or more over several decades, he's worth listening to. But if it's coming from some hack writer who probably doesn't even actually invest in anything other than a mutal fund or 2 in his 401k, you probably want to take it with a grain of salt.
I personally see all penny stocks as this sort of scheme. It's hard for me to take them seriously. I have fun piddling around with them with money I'm willing to lose, and I only do it for fun. I don't expect to see much return on penny stocks, ever.
I would consider QTWW over PLUG. I would wait for a pullback as it is up 20% today. I have been researching it for a month, thinking about pulling the trigger. Has decent fundamentals for a small cap company. The management looks stable. They list 140 employees, so it not a company that is here today gone later today. The low target for the stock is $9.
I think that penny stocks are a good way to get started in the stock market. They may seem like higher risk because they're more likely to fluctuate, especially in the early stages of a company, but at the same time they are low risk because you don't have to spend that much money no them, if you don't want to. The people that make tons of money in the stock market already have tons of money to spend, especially on things like penny stocks. Just think, a millionaire buys 10,000 penny stocks all priced at 1 buck a piece and sells them for lets just say over a long period of time, 5 bucks. He just made four times what he put in and can buy a new car if he wants. That's what the stock market is all about though, risk and return. And sometimes loss, but that's to be expected. Investing is a tough thing to do, especially in today's economy. It is shaping up though, fortunately, at least from what I've seen on the TV, so there is some hope! I'd say as long as the census says that they market is growing, now is the time to invest. Watch carefully, and you can get some big returns. Don't be a lunatic though and spend too much. If your gut tells you NO, it's more than likely correct. Just don't be a pansy (;
A penny stock will always have high risk and high rewards. If the company ends up becoming giant, then you will make a ton of money; however, investing too much into a penny stock that fails can ruin your life.
Low priced stocks shuold fall under the "speculative" category of your portfolio, and the speculative category overall should generally be no more than 5-10% of your portfolio. The rest should generally be in more solid investments.
JREwing: Would you recommend penny stocks to a day trader? Could you list a few penny stocks a beginner in the market could look at?