Your Questions About How To Invest In Penny Stocks

Robert asks…

Hello. I want to invest in penny stock I have heard that it a good 4 first timers in investing.?

But if it was you how much would u invest on you first time?

John answers:

Who ever told you that investing in penny stocks is good for any investor, knows nothing about the markets, knows little or nothing about investing, and has given you very bad advice

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.

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.

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.

Susan asks…

I’m currently 15 years old and i want to learn to invest in stocks and bonds.?

the only knowledge that i have is that bonds are safer but are lower in profit. Stocks are very risky but you gain your fair share. i already have a bank account with 500 dollars. i want to know if someone could help me out by teaching me how to sell and buy stocks and bonds. how does Wall street work. i heard something about the penny stocks thing. i really want to start investing in my future.

John answers:

You have to take risk to make money. All that you mentioned are risky with penny stocks being the worst. First sign up free and check out moneyshow.com and search for topics that you are interested in and view the free videos of those topics.

Sharon asks…

what is a good stock to invest in for stem cell research, or any good penny stock for that matter.?

like many people ive felt the wrath of the economy but at this point with how much ive lost, id like to make some re-gains. if anyone knows good penny stocks to buy into or somthing that may deal with stem cell research since this ban being lifted, please let me know… thank you.

John answers:

LOL, I take it you haven’t been following stem cell research. There is an interesting phenomenon that sends many researchers to non-embryonic stem cells. Something in the embryonics tend to cause a large number of tumors. There are stem cell products on the market and doing well in tests right now that use stem cells harvested or accessed in place from skin cells, fat cells, and bone marrow cells, among a few others. The problem investing in them is that some of the processes are unpatentable (as in occuring naturally). Some of the big Pharma had been burned by both public pressure and poor results while using the available embryonic cell pools, so they want the little guys to fight the battles and let them buy the successes out later. Right now most of the good stuff is owned by hospital and university research labs. These want their share of scientific glory before accepting bids for the rights. Proving something to the scientific community is one thing, but to run the tests that agencies like the US FDA are an entirely different hurdle.

Don’t hold your breath.

Richard asks…

How do I find penny stocks to invest in? I am a beginnner….?

I don’t want to pay someone to tell me….How do I just figure it out myself? I don’t even know the first place to look! I’m willing to take the risk of loss if I’m wrong, but how do you find them?
For anyone that comes back or is answering for the first time- I am not looking to invest a lot of money. I am a 22 year old student that is interested in “higher end gambling.” I didn’t need you to tell me not to do it! I just asked for some advice on how to find them…

John answers:

Read: The Bogleheads’ Guide to Investing: Taylor Larimore, Mel Lindauer, Michael LeBoeuf, John C. Bogle
Unless you are an experienced investor, I would caution against individual stocks and definitely against penny stocks and get rich quick schemes. Reduce your risk and
check out Vanguard ( http://www.vanguard.com )
Now is an excellent time to put your money to work. Spread the risk by investing in a mutual fund (Vanguard’s STAR is a fund of funds-a fund which buys shares in other funds-and therefore carries a lower risk) . It is comprised of 65% stocks and 35% bonds.

Make sure any high interest loans/credit cards are paid off and you have 2-3 months emergency cash before investing.
Vanguard is a low cost, no load mutual fund company. There are others; I have been with them for 30 years and retired early. Your results may vary.
Read the “Planning and Education” tab if you visti their website.
Good luck

Joseph asks…

Any good tip on how to research penny stocks?

Hi! I am thinking about starting investing in penny stocks. Does anyone have any good idea on how to research them?

I believe it is mutch easier with normal stocks than with penny stocks.

Source: http://www.goarticles.com/cgi-bin/showa.cgi?C=508712

John answers:

If you actually want to make money on investments and you have no experience, stick to mutual funds.

Many, perhaps most, penny stock companies have never made money and never will. They basically feed on neophytes such as you to provide a constant stream of income. They merge and have reverse swaps (10 shares for one) until the value of your investment is not worth the cost of one stamp.

Been there, done that, I only lost $250 over a five year period.

It is NOT easier to research penny stocks, because they do not have to reveal as many necessary bits of information. That is why they are not allowed to trade on the major exchanges.
Canadian mining companies are particularly likely to take your money.

You have been warned.

Check out FEZ, IEV, EZU and EWA, all pretty good overseas index mutual funds that have done well recently.

And good luck.

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