Penny Stock Fortunes – Are They Real Fortunes?
Penny stock investing is perhaps the riskiest financial enterprise you can venture on due to three major reasons: lack of information on penny stock companies due to their short trading history, low liquidity and penny stock investing scams that play a considerable part in this scheme, too.
Beware of penny stock fortunes scams that have been increasingly active due to the recent economic downturn, especially if you get hot penny stock picks offers through e-mails or if they are highly recommended through a free stock evaluation website. As we all know, free cheese comes only in a mouse trap, so a free piece of advice could only be an invitation to penny stock fortunes scams, to say the least. One of really good examples to show how penny stock fortunes scammers operate is called a “pump & dump” scenario, where a certain penny stock is widely advertized through mass media or via “free” penny stock website creating a penny stock investing hype. In reality, the scammers are merely working on manipulating the penny stock market and driving up their stock prices. As soon as their penny stock skyrockets in price, they immediately liquidate all the shares and exit the scene leaving you penniless. This is just one of many ways penny stock scammers can manipulate volatile penny stock markets.
By no means are we saying that penny stock fortunes are impossible, just that these are very unlikely. For one worthy stock, you are likely to see a hundred “empty” shares of companies who display very poor performance or don’t deliver on their obligations.
If you are still firm in your decision to create the next penny stock fortune, learning multiple ways to analyze a penny stock company is a must for any successful penny investor. Pay attention to the company behind the stock, actual sales, earnings and product they are offering. The best penny stocks are of companies who are introducing a new product or technology to the market, working on reducing costs and buying their own shares back.
Penny stock fortunes do happen but not to many of us, there are definitely better ways to invest your hard earned dollars in today’s market.
You will find a variety of penny stock articles on our website, including which Canadian penny stocks are worth looking into.