Where to find advice on investing in penny stocks

There are as many ways to invest your money, as there are dollars to spend. You can by that piece of land down the road. You may want to invest in your kid's future by putting some money into a jar or an account for college. The girl down the street sells cookies for her Girl Scout troop and the boy sells magazines for a high school trip. All of these methods of investment help someone get something they want. However, usually, you want your investment to help you. You want to grow your capitol. Helping the neighbor kids is nice, but where are they going to be when you need money for retirement? If you look at the stock markets these days, it is easy to dismiss them out of hand. However, there are still some stocks that are good buys. Penny Stocks trade at a small price and can grow astronomically.

The problem with investing in Penny Stocks is that they are so easy to manipulate. Because of this, they are waters, which can contain many sharks. Therefore, it may be difficult to trust anyone person (even if they are you brother in law) to help you invest you hard earned money in these stocks.

The federal government has a specific page on its Securities and Exchange Commission (SEC) website designed for those who would get into the Penny Stock market. The language is telling. The SEC says for one that, " Investors in penny stocks should be prepared for the possibility that they may lose their whole investment." This is good advice to heed. Because of their volatility, these stocks may not be the wisest investment for seniors, or anyone that needs to be sure of their investments. These stocks can plunge at any time. Also because of the profit that can be made there are many frauds.

Pump and ump schemes are those in which a group uses mainly the Internet to boost the price of a particular stock. When they get the price up, they sell (or dump) the stock and leave the other investors holding the bag. Chop stocks are those that are bought for a very low price and then resold to overseas or domestic retailers. Some of the biggest frauds are those, which involve the Internet. It is easier now for a fraudulent investor to promote a stock through spam emails, or ads that tout very ludicrous claims. They may say that their Penny Stocks are a free investment (never true,) or that they have something that you must buy now. Up to 15% of the daily volume of spam, email is talking about these stocks.

The way to avoid this is to read what the SEC website has for you about this type of investment. They are an unbiased source that was put there by the federal government to make sure that citizens are not taken to the cleaners.

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