| Penny Stocks can be a great investment, but you | | | | PR firms, or Investor Awareness firms, are sometime |
| have to know what to look for, or sometimes more | | | | hired to promote a small corporation's stock in hopes |
| accurately, what to look out for. Buying Penny | | | | of raising the share price. This in itself is not |
| Stocks based on a recent email you received, or | | | | necessarily a sign of ill intent. Many times a small |
| what you heard from someone you barely know, is | | | | company may be very good at what it does, but for |
| not usually a good idea. Penny Stocks have historically | | | | whatever reason finds itself unable to generate |
| been a source of wealth for many investors, but | | | | enough press interest in their successes to generate |
| conversely have been the source of countless lost | | | | buying activity of their stock shares. However, this is |
| small fortunes. Determining what is good advice, | | | | occasionally done with the sole purpose of raising |
| mixed with all the hype, can sometimes be a very | | | | prices rapidly in an attempt to make quick profits on |
| difficult process. You don't have to be a stock | | | | a very hollow company, one that has no real market |
| market guru or brilliant investor to make a killing with | | | | or solid foundation. Hence the phrase, pump and |
| Penny Stocks, but you do have to be willing to do | | | | dump. Pump and dump in a nutshell means, |
| your homework, and use a great deal of common | | | | exaggeratedly "pumping" up the company in question |
| sense to stay alive when you are swimming with the | | | | with the primary intent of "dumping" their shares |
| sharks in what can be dangerous waters. | | | | once the share prices begin to rise. |
| There are many great small companies in existence | | | | What can you do to protect yourself from being |
| today, struggling to stay afloat, that are tomorrow's | | | | caught up in a pump and dump scenario? Most |
| rising stars. Without the capital to grow and expand | | | | importantly you must use your own due diligence to |
| very few of our current generation of conglomerates | | | | wade through the hype. Ask yourself a few basic |
| would be more than a forgotten flash in the pan. | | | | questions about the company in question. Are they |
| Selling shares of a company can inject the needed | | | | making money? Are they creating new products? |
| capital into a niche business that may take it into the | | | | Are these new products going to be valuable in the |
| next level. However not all, if not most, of these tiny | | | | future? The rules for trading Penny Stocks aren't |
| corporations will be around for very long. This creates | | | | much different from those of trading large cap |
| an interesting situation for us, the investor or | | | | stocks. However, the risks can be much larger, but |
| speculator. While the company in question may not | | | | the rewards can be as well. |
| be worth much today, what might that company be | | | | If you aren't willing to do at least a bit of homework, |
| worth tomorrow? Hence the term speculation, which | | | | investing in any stock is not a good idea. Never rely |
| is the lifeblood of any Penny Stock trader. | | | | entirely on anyone's advice, especially when dealing |
| Unfortunately, within this world there are a few | | | | with Penny Stocks. But, if you take the time to |
| unseemly characters, who seek to part you from | | | | research your investments, investing in Penny Stocks |
| your hard earned dollars. And, they will go to nearly | | | | can be a very financially rewarding experience. |
| whatever means is necessary to achieve their goal. | | | | |