Are Finance Grads Striking It Big In Penny Stocks?

Published April 5, 2014

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Getting involved in the penny stock market can bring great returns in addition to losing everything you invested into. The risk and rewards are both very high but is a great low-cost way to learn how to invest your money. Although investing in penny stocks can be risky, you can reap great profit with a fairly low initial investment. Investing in penny stocks may not be at the top of a comprehensive list of personal finance tips, considering it’s risk, but it’s worth a look.

Financial grads have a great opportunity in front of them with penny stocks because they have great market analysis skills in addition to seeing the potential a company may have on the penny stock market.

Of course each individual’s financial situation is different but an ideal starting investment can be as low as under $3000. There are many strategies that are currently out there on how to be diverse in the penny stock market with your money. Just make sure that when you do decide to invest in the penny stock market and pink sheets that you do extensive research and understand what you are getting yourself into. They are very high risk, however can be very rewarding if you are trading with companies that are showing good profits.

One of the main rules of thumb with penny stocks is you typically sell quickly. Penny stocks can make 20% to 30% within a few days so if you are seeing those type of returns you need to sell quick so you can have a great profit gain on your investment.

Although it may only be a few hundred or few thousand dollars you will be in a better financial situation that you were a few days earlier. But they also can drop 20% to 30% within a few days as well so remember being diverse in penny stocks is a good way to spread out your investment so you do not lose it all on one stock.

Before getting started on the OTCBB and pink sheets make sure you do some strong research in the companies that you are investing in. Although there are some very solid companies that are working hard to reach the Nasdaq or NYSE; there are also a handful of companies that are looking to make some quick investment money. Check out this article from Investopedia.com to get The Lowdown On Penny Stocks. Good luck and happy investing!

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