Posted on 24 November 2011.
The assistance provided by penny stock reviews can be immense. There is a dearth of information about penny stocks when you compare them to stocks from mid-cap and large-cap stocks. Penny stock reviews are one way that investors in these micro-cap companies can overcome their lack of knowledge and enhance their research. At the very least, they can tip traders off about the newest penny stocks and provide them with names to investigate. Sometimes they can also provide valuable information about these stocks.
However, penny stock reviews are not completely trustworthy. In some cases, the issuers may use their influence over eager, information-hungry traders to manipulate them into buying a stock and pumping up the price. Then the previous stock holders sell their shares and cause the stock’s value to plummet. This is known as a pump and dump scam.
Sometimes the people running penny stock reviews may be duped themselves and spread information or hype about a stock that is not based in reality. The purpose behind this misinformation may be the same as in a pump and dump scam. It may also just be an attempt to raise the price of a stock that simply does not deserve all that notice.
Often these penny stock reviews refer to themselves as prophets or wizards. This makes them sound all-knowing. Beware of reviewers who need to use this sort of vocabulary to aggrandize their competency. Often they are just scam artists with their own agenda. If a review truly shares valuable information, it will not need to come up with a special name. Other investors will let you know how they have fared when they counted on certain sources of information. This is the best way to find trustworthy penny stock reviews.
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