How Much Money Is A Billion Pennies

Penny stocks may sound like an interesting investment option, but there are some things that you lot should consider before deciding whether this is the right investment choice for you.

Opposite to its name, penny stocks rarely toll only i cent. Rather, the Securities and Exchange Commission (SEC) gives this moniker to stocks costing less than $5 per share. Penny stocks are depression-priced, smallcap stocks considered to be a speculative investment. Many people consider them to exist a very risky proposition. Most penny stocks are non traded on the major exchanges.

How Can You Purchase Penny Stocks?

As is the case with any kind of stock, y'all tin buy penny stocks through a broker — even if information technology's not listed on one of the major exchanges. Penny stocks listed on the major exchanges like the New York Stock Commutation or Nasdaq bear less take a chance than those that aren't because the major exchanges take stricter requirements. Near penny stocks are traded on listing services similar Pink Sheets and Over-the-Counter Bulletin Lath. Be cautious of listings on Pink Sheets as they are not subject to SEC regulations and thus are a risky investment.

Why Purchase Penny Stocks?

If you stand by the old adage of "no risk, no advantage," and so investing in penny stocks might just be the right investment for you. Most advisers agree that they should only account for a very small percentage of your overall financial portfolio. Penny stocks are prone to major volatility, and information technology'south possible that y'all could purchase a stock for $.06 a share that jumps to $6.00 a share in a matter of weeks. Just that sort of scenario is rare. You're more likely to lose coin on a penny stock than to accept a meaningful gain.

Liquidity

Ane major drawbacks to penny stocks is their lack of liquidity, meaning of you want to get your easily on the money you've invested, it brand take awhile. This is considering they take depression market place capitalization, so there might not be a heir-apparent for the stocks y'all're trying to sell.

Other Things to Note About Penny Stocks

Remember it'south heir-apparent beware when it comes to penny stocks. Sure the stories of investors making a ton of money off them are out in that location, just the vast majority of the stories that you don't hear involve losing money with these investments. Many penny stocks simply practice not accept much data available about them, which makes it tougher to make audio investment decisions. There aren't as many fundamentals and reports available to peruse, and much of that data is rarely from reliable sources. Be certain to talk with a trusted investment adviser who can assist decide if penny stocks might exist a good choice for you.