Penny stocks are not for everyone. For the risk averse and investors seeking high and quick returns, penny stocks are not likely to deliver. However, they can be a valuable commodity and many a broker or investor will likely be able to identify what penny stocks are likely to grow over time, and which stocks will not return on investment. What are penny stocks? A stock trading under $5 is or share trading under $1 can be defined as a penny stock or share. These are sometimes referred to as Nano stocks as well. These stocks define the company’s market capitalization, which will vary from overall stock prices.
The companies that offer penny stocks are often small scale successes in their own right. Microsoft and Google need not apply. Valuable companies happen over time and do not appear overnight. Companies at this stage are offering penny stocks. While some investors may believe that sifting through penny stocks offers a way to “hit it big” in the stock market, this is unfortunately not a proven strategy to success. Penny stock investors must be consistent and invest for lengthy periods of time. This strategy will prove to be unsuccessful in most cases.
Value and Bidding
The spread value of these types of stocks round out to about 25 to 33%. They can sometimes even fall between 50 to 100%. Bidders are allowed to place inside and outside bids on penny stocks. The outside bid and ask are generally of greater value to the bidder. There are no single rate prices at which penny stocks are bought and sold, but rather, a number of different prices exist. Navigating the prices and spreads of these stocks should be done with an experienced broker as prices can sometimes be misleading.
Brokers make their money on the spread, in addition to taking advantage of buy and sell times. The difference between the bid and ask price is known as the spread. Penny stocks are known for markups in pricing due to broker’s accounting for the risk associated with the stock and price fluctuation. This can make for a complicated process when deciding on what penny stock is safe for investment. The best way to get into these stocks is through an experienced broker that is knowledgeable of the potential benefit of investing in a specific penny stock or stocks.
The risks associated with penny stocks are largely due to the lack of information that is known about this micro-market. These stocks are not traded on the stocks exchange but traded in an (OTC) market. This shouldn’t stop interested parties in exploring this very small but valuable market overall.
Technology has advanced at warp speed over the past few years. For those that value the art of investing they can now find themselves with access to some of the best Stock Analysis Software. These software programs help in managing and maintaining portfolio investments. As an individual investor you can find access to this software online or at brokerage firms when you open a brokerage account. Many of these firms provide trading software as a bonus.
MetaStock Trader is a favored application. It offers over 300 indicators, integrated news, and important data that is combined with screening and searches to allow you to filter your searches by criteria. It also provides access to global markets and multiple assets. MetaStock is an award-winning analysis tool that has been in business for over 30 years and continues to implement advancements into their programs.
VectorVest has software platforms not just for the US, but also provides offers for those that reside in Australia, Canada, Europe, India, Hong Kong, Singapore and South Africa. VectorVest allows you to try out their software for 5 weeks for under ten dollars at no risk to you. This stock analysis and portfolio management system analyzes, sorts, ranks and graphs over 23,00 stocks every day for you. It also provides additional recommendations on stocks that the client may be interested in obtaining.
For those searching for low-cost or free stock analysis software StockCharts is a well-known option. It is very simplistic and concise. They provide additional tools for a fee such as, historical charting and additional analysis. But, customers can find themselves with free access to many of the tools they need to obtain quality analysis.
Yahoo Finance is a popular and free stock analysis software. It is very easy to navigate. It provides quotes, research, news and market data for your benefit. It also provides a search bar for quotes look up. Access can easily be attained with your Yahoo email account.
In competition with Yahoo Finance is Google Finance. It is equally as easy to navigate. It is concise and clean. Their charting solution for investors is direct. Google Finance provides you with important events that occurred on important days for the stock. You are also able to look back in time and retain a historical analysis for a particular stock.
For the best stock analysis software one must choose the one with the best tools for their particular needs.
A penny stock is almost a fabled thing, much like a unicorn or a Miss America contest winner. The celebrity of being a penny-stock winner is just one of the many reasons that penny-stock investing has gained in popularity over the years. There are various reasons, some good and some not for why one might consider getting involved in the high-risk, high-potential-gain stocks in the “penny arena.”
For any readers that are familiar with hearing the terms penny stock but aren’t fully aware of what that means, let’s do a quick recap: Essentially a penny-stock is something little more than a stock whose price is low. If a stock price is over a dollar, typically it becomes disqualified for being considered a penny stock, but being at that price level alone isn’t what makes a penny stock. The other consideration is the fact that the company is usually a startup with a high potential growth possibility. Typically penny stocks that gain a lot of attention are around companies doing research and development in new experimental technologies, medicines and breakthrough inventions.
Based on what we’ve stated so far, it is already starting to sound like a penny stock investment is a really good idea. Whether it is or not has a lot to do with how you look as an investor. If your starting capital is too low and you have a shorter time frame in which you are hoping to receive the return, you should perhaps consider if you have the ability to stomach a loss, should one of your penny stock bets fail. If the answer is no, then penny stocks is probably not for you.
The typical commonplace wisdom about penny stocks are that they are always a bad idea and are a sure-fire way to lose your entire investment capital. Despite the fact that this is the traditional wisdom, countless investors are still flocking to the asset class, but why? The answer is simple and clear: Penny stock investors are a breed of investor that probably also frequents the casinos and the horse tracks. Too addicted to the thrill and legend of a massive win and perhaps too obsessed with the risk of failure as well, the penny stock investor is surely their own breed compared to the blue chip stock investor. What type of investor you decide to be will have everything to do with your values and goals as an investor. Make sure you decide which investment classes are best for your own personal situation.