Thursday, September 23, 2010

Penny Stocks

I have quite the finance string going, why break it?
In the interest of trying to beat the interest rate the bank gives me, I have a stock portfolio. Most of my investments are sensible, and I said I would never put money in anything other than a large, stable company. Somehow I ended up with a few thousand dollars in penny stocks anyway. At the risk of sounding like a pump and dump, I will not tell you which stocks I hold.

My advice? Don't even try it. Putting money on the pink sheets has the potential to net you enormous gains. However, the pink sheets are not subject to SEC regulations, and the companies on the pink sheets mostly just want to find ways to make themselves money. Unannounced 1000 to 1 reverse splits, bribes paid to penny stock blogs to pump their company, and other tricks are not only legal here, but quite common. These firms are looking out for #1, and they have nothing left to lose.

If you do end up in penny stock land, though, I have one piece of advice that has been a very expensive lesson for me: Spend the time, and lots of time, to look for companies that seem completely sincere about efforts to make money, pay off their debt, and become financially viable. Trust me, there are not nearly as many of these as you would think.

6 comments:

  1. Hmm good information thanks mate

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  2. I had a look into these a couple of years back but thought against it I may invest in some companys later in life but not at the moment.

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  3. I won't try it. I don't have the nerves for it. Also, I know many who failed it.

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  4. This is useful advice regarding stocks, nice post.

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