Penny Stocks, even though a risky investment, are very popular among many new and seasoned investors. You don't need a huge investment to get started trading penny stocks and you can still turn a tiny investment into a huge fortune. Generally Penny Stocks or also known as micro cap or small cap stocks are sold for less than a dollar per share. Penny stocks are not found among the stock exchange giants such as the American Stock Exchange (AMEX) or the New York Stock Exchange (NYSE). The modern way of buying and selling penny stocks is over the Internet. There are various on-line companies that make it very easy to get started.
When investing in penny stocks there are some risks you have to account for. Watch for stocks that are over-hyped and always be aware of the element of fraud. With penny stocks the companies do not have to report their financial health therefore you have to be very careful to research the company yourself if possible. Also the price of the stock does not reflect the companies value.
The assistance of a stockbroker or a subscription to a newsletter can be a great way to find good investments. Penny stock picks are a good way for a beginner and even an expert find stocks that are about to increase in value. Stock picks come from different methods, some better than others. You should still do your own research on the stock but this method helps you to narrow down your list to stocks that are being recommended by a reputable source.