Knowing How to Find Penny Stocks Is Just the Beginning

If you are frustrated with investment gains that do not keep up with inflation, consider alternative investments that have the potential for more ambitious returns. Among these options are penny stocks. These low-priced shares in largely undiscovered companies have the kind of upside that you need. You can find such stocks only in the over-the-counter (OTC) market.

When you step outside of your comfort zone like this, you will need to remind yourself constantly of some important facts. For example, the SEC provides some oversight for people trading on the NYSE, the AMEX and other stock exchanges. The OTC market has no such regulatory oversight. When you trade in these equities, you deal directly with buyers and sellers. The only protection against fraud that you have is your own common sense.

How to Find Penny Stocks that Will Return Profits

Now that you are forewarned and forearmed, you should consider how to find the very best among these stocks. You will not have access to the kind of fundamental information that you are used to reviewing when you invest in the regular stock market. There are few balance sheets available for the underlying assets in this setting. Instead, you will have to rely on other factors to encourage investment.

• Are the workers, managers and owners buying their own stock? If so, this may be a good sign that the company looks good from the inside. These investors have the best viewpoint in that regard. You might want to follow their lead when this happens.

• Look at the past price performance of the penny stocks. Many securities follow discernible patterns in their price movements. You can use past analyses to help you determine when to buy a stock and when to sell it.

• A huge change in volume is a sign that the price will trend upward soon.

Use these signs and others to guide your investment decisions. As with all stock investment, decisions will usually turn into profits when they are well-planned.

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Are you wondering how to find penny stocks?

If so, you have plenty of company in the persons of prospective colleagues who also want to know how to find penny stocks. A basic comprehension of why penny stocks can often be elusive is crucial for beginning speculators.

 Why are penny stocks so difficult to find?

Penny stocks are widely regarded as “red-headed step kids” of blue-chip securities. Consequently, most mainstream brokers avoid them like pecuniary plagues. This collective reticence stems from a universal economic law that you “get what you pay for.”

In essence, penny stocks are fund-raising projects hosted by fledgling concerns and untried venture sponsors. Parties in such dire straits rarely have big advertising budgets. Thus, extraordinary effort is necessary to excavate rare golden nuggets from vast financial penny stock mines.

 How to find penny stocks online

Virtual reality has made it very easy to glean accurate insights and invaluable guidance in your quest for the best penny stocks. Below is a trio of terrific tips for winning the race to high-yield penny stocks:

–              Internet investment forums

Many investor-friendly websites currently exist to assist would-be traders to learn more about how to find penny stocks. Bankrate.com and MotleyFools.com are two noteworthy examples. Both sites offer periodic e-newsletters that feature credible input from reputable sources. Even better news is that these gems of investment wisdom do not cost a single penny.

–              Web-based discount brokers

Conduct a search engine query for consumer reviews about virtual discount stockbrokers. Visit the top two or three most promising e-trading platforms to conduct cost comparisons of commission and fee structures. Then, simply open and fund an account at the most appropriate venue.

E*Trade.com is a rare but excellent example of a reputable online stock brokerage that customer access to over-the-counter penny stock bulletin boards.

–              Read between the lines

Review “biggest gains” lists that DOW and NASDAQ at the close of every trading day. Look for stocks with current per-share price listings at or below $1 USD.  Click the symbol(s) displayed in respective adjacent charts for a free, quick-start lesson on how to find penny stocks.