Considering getting into the stock market with little to no experience? Penny stocks could be your best bet at getting started. Like all stock trades, it still comes with risk, but the price point is a little more manageable for a beginner. Let’s talk about what penny stocks are and where to find the best penny stocks. (Image Credit: StockSnap/Pixabay)
What are Penny Stocks?
Penny stocks, or “pink sheet stocks” are company shares that typically trade for less than $5 dollars. Generally speaking, penny stocks are sold over-the-counter (OTC). They typically aren’t traded in the major exchanges, although sometimes if a penny stock maintains a price from $1 to $5 a share, it may get listed on the New York Stock Exchange.
Penny stocks are a cheap option to get into the stock market without a whole lot of money to invest. Its a great starting point for someone interested in learning the ways of the market, and if you invest wisely, you can actually make some pretty decent returns on your investment.
How Do I Buy Penny Stocks?
You can purchase penny stocks through an average stockbroker. Unlike other stocks, That get listed in NASDAQ and NYSE, penny stocks are listed on the Over-the-Counter Bulletin Board (OTCBB) or Pink Sheets. To make it easier to access and trade stocks, there are best penny stocks app options that allow you to do this.
The OTCBB would be your safest bet to look at when considering purchasing penny stocks. They have listing requirements that set a bit of a standard for stocks. Pink Sheets is simply a quotation publisher, not registered with the U.S, Securities and Exchange Commission (SEC). Because Pink Sheets is not registered with the SEC you run a higher risk of making a poor investment.
Are Penny Stocks Worth it?
Absolutely. They offer an exciting opportunity to start investing for your future. Penny stocks are a great way to start learning the market, and with a little practice you can start building enough returns to make yourself a sizable amount of money for the future. The key is to do your research and follow the market a bit before jumping in.
It’s a good idea while you begin to watch the market that you make predictions before investing your money. This way you can see first hand if you are making the right choices before putting your money down. Practicing in a stock market simulator is a great way to do this, they set you up to learn the platforms and the market without using any real money. This is also known as Paper Trading.
Where can I Find the Best Penny Stocks?
Raging Bull is a site that helps teach people the ins and outs of financial trading. They have a list of their best penny stocks to invest in, and offer tons of insight and resources to learn more about trading. They can help you find out what companies are worth the investment and how to get started. So if you are new to the world of the stock market, I highly recommend you check them out.