Your Questions About How To Invest In Penny Stocks

Donna asks…

Investing in penny stock good Idea or bad idea ?

Hello, everyone, I appreciate your answers and your support. Thank you so much, now I’m 16 years old about to become 17 years old, I have 2 Jobs, and I can’t even keep a dollar In my pocket. Now, if I invest in penny stock, how much do I have to put down for an investment ? if i do gain money will i be able to withdraw it out ? I wanna invest I’n penny stock and I just need a direction to go to. Thank you for your support

John answers:

Most penny stocks are pump-and-dump scams, which means you’ll lose massive amounts of money.
It’s not even a matter of experience as Common Sense says–you simply have no idea what you’re getting into regardless of how much experience you have.

Most institutions only invest in stocks $5.00/share or higher. Since the Smart Money doesn’t deal in penny stocks, why should you?

Mary asks…

How Can I Learn More About Short Selling Penny Stocks?

In my opinion, one good investing strategy is to short the particular penny stocks that have risen dramatically in price in the short-term. Can anyone help me locate websites that discuss short selling penny stocks?

John answers:

You cant short penny stocks unless you are from a foreign country.

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Richard asks…

Question about penny stocks?

I’ve been researching how to get started with penny stocks for the last 2 years. I’ve asked several banks and read forbes magazine. The bank said I have to have $25,000 in order to invest in the penny stocks and keep some sort of balance. I do not have that kind of money.

An online company said I’ll need to put up $900 with no balance but I’m risking $900. I don’t have $900 to risk with a husband and a kid.

Is there a penny stock for the average working person like me who pays bills that is affordable. I do understand it’s not a get rich quick situation and that it may take 3-5 years or longer to see any real results. I’m prepared to wait whatever amount of time. Right now I want to find out how to get started. Can anyone help me?
Joey V I know someone who is doing this and she’s doing quite well. When she lost her job she still had money coming in from the stocks to keep up with at least half of her bills while she found another job. I saw that she was successful. I want to do better as well. How is that dumb?

John answers:

All registered broker/dealers permit their customer to deal in penny stocks, BUT most firms do everything they can to discourage such activities. From a brokerage firms perspective, penny stocks are expense to trade, expensive and time consuming to clear and labor intensive to hold in street name. As you can see the firms that you contacted are quoting you a very high price to open an account and requiring excessive balances be maintained.

When you invest/trade in penny stock you should never put up more than you can afford to loose and you should assume you will loose it all. Unlike regular securities, penny stocks usually do not let you use risk cutting procedures (options and/or stop orders) since most are not traded in a regulated market place. Since there no requirement on market makers in the OTC Market it may be difficult to find a buyer when selling is required.

They say when you buy securities you have a 50%-50% chance of making money, when you buy penny stocks you have a 50-50-90% chance, 50-50 chance of making money and a 90% chance of loosing money. Since there are no meaningful regulations for trading only those with trading experience stand a chance of being successful trading in penny stocks. Penny stocks are not for newbies.

When buying penny stocks, like any other security investment, you never invest 100% of you investing capital. Penny stocks are fun to trade, but you should never count on them to be considered part of your primary investment objectives. One should not trade penny stock unless they have several years experience trading regular securities.

I do not mean to preach to you, but based on my 40+ years in the brokerage industry I think you are very foolish but I’m not here to pass judgment but only try to assist you.
All that said, here are some websites that you will find helpful
http://www.smallcapinvestor.com/
http://www.stockwire.com/
http://www.otcstockexchange.com/
http://www.pinksheets.com/pink/quote/index.jsp
http://ragingbull.quote.com/cgi-bin/static.cgi/a=index.txt&d=mainpages
http://www.pennystocks.com/
http://www.penny-stock-brokers.org/
http://www.pennystockalley.com/
http://www.superstockhunter.com/
http://thestockmarketwatch.com/markets/pennystocks/today.aspx

Paul asks…

How to invest in penny stocks online?

I always hear of people investing in penny stocks online and i was wondering if you guys know of any websites that let you invest in penny stocks online with paypal or moneybookers or alertpay. I am good at checking if a site is legit using tools such as mywot and google. So please just find me some links that i can use to invest and penny stocks and i will check them out thanks a lot!!!

John answers:

If you make any securities investment North America you can use paypal, moneybookers or alertplay, you need to use either a direct money wire from your bank or a check.

All brokerage firms tolerate their customers trading in penny stocks, although none of them recorecommend or support such activities

If your so good at checking websites it would be in your best interest to check the penny stock markets.

When you invest/trade in penny stock you should never put up more than you can afford to loose and you should assume you will loose it all. Unlike regular securities, penny stocks usually do not let you use risk cutting procedures (options and/or stop orders) since most are not traded in a regulated market place. Since there no requirement on market makers in the OTC Market it may be difficult to find a buyer when selling is required.

They say when you buy securities you have a 50%-50% chance of making money, when you buy penny stocks you have a 50-50-90% chance, 50-50 chance of making money and a 90% chance of loosing money. Since there are no meaningful regulations for trading only those with trading experience stand a chance of being successful trading in penny stocks. Penny stocks are not for newbies.

When buying penny stocks, like any other security investment, you never invest 100% of you investing capital. Penny stocks are fun to trade, but you should never count on them to be considered part of your primary investment objectives. One should not trade penny stock unless they have several years experience trading regular securities.
And before you enter an order for penny stock, read what the SEC has published regarding penny stocks http://www.sec.gov/investor/pubs/microca…

All that said, here are some websites that you will find helpful
http://www.smallcapinvestor.com/
http://www.stockwire.com/
http://www.otcstockexchange.com/
http://www.pennystocks.com/
http://www.penny-stock-brokers.org/
http://www.pennystockalley.com/
http://www.superstockhunter.com/
http://thestockmarketwatch.com/markets/pennystocks/today.aspx
http://www.awesomepennystocks.com

Sharon asks…

Could I become a millionaire quickly if I invest into a great penny stock?

When I turn aged 18 I intend to invest into penny stocks with the £4,000 I should have by then. If I choose the right ones, could I become a millionaire reasonably quickly with the money I have?

John answers:

No. It would be like a casino. With bad odds, you’d lose more times than you win.

People who become millionaires in the markets use risk management and leverage for blue chip and larger growth stocks. You also need to learn technical analysis (reading stock charts) and fundamental analysis (analyzing the company) and watch the overall market FTSE 100 index to succeed.

For the UK and Ireland, you could try studying the stocks on the FTSE All-Share Index: http://uk.finance.yahoo.com/q/cp?s=%5EFTAS

UK stocks are measured in pence instead of pounds so don’t freak out if a stocks is quoted at 2000. It’s only 20 pounds.

There’s no hurry. The London Stock Exchange is always going to be there. Better to learn first and profit later than lose your 4000 pounds.

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