Beginners Guide to Penny Stock

Jeremy BiberdorfBy: Jeremy Biberdorf

December 19, 2014December 19, 2014

Beginners Guide to Penny Stock

Many people are looking to figure out how to build a stock portfolio. Some of the best stocks are $100 or more per stock, which means that it can be very expensive to get started within the stock market.

Many people don’t have $10,000 or more to get started and even when they do, the $100 stocks rarely move considerably, keeping profits low.

Penny stock trading has grown in popularity. Penny stocks are those stocks that trade at less than a dollar per stock, which means they literally cost pennies to buy. Not all penny stock is good stocks, however.

It’s important to know what to look for and buy with caution as there are many penny stocks that never amount to anything, which could lead to wasting a lot of money.

Why Penny Stock Trading?

There are many reasons to get started in penny stock trading. It’s an affordable way to start investing and many people are looking at retirement in several years without the money in savings to be able to do so at the level they want.

Penny stock is giving people a new lease on life and allowing people to make considerable gains in short periods of time.

A penny stock can be found in virtually every industry. Some of the most popular industries for penny stocks include:

  • Pharmaceutical
  • Web technology
  • Nanotechnology
  • Gas & Oil

You may have a preference within what industry you want to trade and one of the benefits to penny stock trading is that you can choose the industry. Regardless of how much you have in start-up money, you can begin to make money.

Some of the profits that you earn can then be used to buy more penny stocks, providing you with even more opportunities to turn up greater profits.

It Starts with a Program

Anyone who wants to find good penny stock needs to know where to look. There are tried and true programs with methodology out there so that you know what to look for, where to buy, and ultimately how long you should hold onto the penny stocks.

Often, it has nothing to do with the company itself. It has to do with the hype of a particular stock. A penny stock can go from five cents to 15 cents overnight. That may not seem like a lot of money, but if you are buying 10,000 shares, that could be $1,000 in profit in a single day.

TIP: Consider a service like Investors Underground to get the latest penny stock trading alerts.

There are not many stocks that offer such a substantial amount of earnings in a short period of time without having to spend a lot of money. Those 10,000 shares would have only cost $500.

Good penny stock is out there, but you need to do your homework. This includes exploring press releases to see which companies are developing, which ones are in the news, and which ones have the possibility of being bought out by larger companies.

What Tools are Needed to Get Started?

When you are looking for penny stock picks, it’s important to know about some of the tools that will get you started. This ensures that you are learning when to pull the trigger on a particular stock, how to profit boost, and how to get started within investing.

A program for penny stocks should include:

  • Trade alert toolbar
  • Trading DVD
  • Access to private blog
  • Guide with FAQs

All of these tools can make it that much easier for you to figure out what needs to be done in order to penetrate the penny stock market – and make money while inside of it.

The tools will work with you from different angles to ensure you get your questions answered and you learn a strategy that has worked for others. Even if you have been investing for years, you need to be re-taught how to invest because penny stocks are unlike any other type of investment opportunity. They trade differently and the profits are very different.

By having the trade alert toolbar, you can use technology to help you learn about the various stocks and when to buy and when to sell. The blog can also help with some of the new tactics and get questions answered by people who are “in the know”.

How Much Money Can Be Made

The stock market is constantly changing. What works for someone this week may not work for them next week. However, once a good strategy has been discovered on the penny stock market, it’s possible to make considerable amounts of money by knowing what stocks to go after.

The good penny stock picks have made a lot of people a lot of money.

There have been individuals who have turned around $12,000 into $3.2 million and higher over the course of a few years. Some people have had such significant luck with penny stocks that they have quit their job to be a full time day trader and are making $10,000 or more in a single month.

You have to decide how much you want to make and how much you want to invest. There are tools to help you along the way. Your goal can be to build up a retirement fund or to create a full-time income.

Regardless of what you decide, penny stocks can be the way to enter the investment market without spending a lot of money and be able to turn out considerable profits with each and every trade that is made.

Related Links

Jeremy Biberdorf
Jeremy Biberdorf

About the Author:

Jeremy Biberdorf is the founder of Modest Money. He's a father of 2 beautiful girls, a dog owner, a long-time online entrepreneur and an investing enthusiast.

3 thoughts on “Beginners Guide to Penny Stock”

  1. Thomas @ i need money ASAP!

    Penny stocks have a high risk/reward ratio which is why they can be so profitable. It’s also why many new investors lose their shirt with penny stocks. I know I did. Now to get some exposure to those types of stocks I use a venture capital/small cap ETF. Works the same but way more diversification.

  2. There are a lot of scamsters out there, so one really needs to be careful when getting into this mode of investing. Done right though, it is a great way of getting started!

  3. Thanks for this informative piece! Not really a fan of penny stocks because of their very fast movement but I might try it one day!

Leave a Comment

Your email address will not be published. Required fields are marked *