Most people want to quickly make money these days. This is one of the main reasons that so many people are getting scammed and often lose a lot of money probably. Sad to say that the mentality of "money" reached leaving the stock market, many people, it is inappropriate, penny stocks to invest in, which can often be too risky to start with, let us know, as this diversity of stocks, which is actually a problem for investors may be.
What are penny stocks?
Penny stocks are the stocks that are sold for less than a dollar, or, in some cases, less than five dollars per share. Most of these stocks have only short story work and only a few million dollars in assets. Typically has a low market of caps, the minimum liquidity requirements and acted often in the OTC market.
Why is risky penny stocks?
What you should know is on these stocks, which trade can be much more than normal inventory risky. Finally, with questions such as these stocks, you do not have a suitable background, offers a very limited amount of information about the company and a major threat often for bluff represent.
The absence of light
The danger is, if companies are willing, trading in shares in a small amount, probably have very little history or have a very negative. These companies are either just start the business, or they can have experienced bankruptcy, so they take up their inventory for such low prices to sell.
Because penny stock companies much information, there is a very great chance that you could make bad investments. And, of course, you can stop losing more money than to get you.
Limited information
For most organizations, that penny stocks is not much information for investors map online or anywhere else is available. In the end, the most Exchange in this market seems over the counter Bulletin Board (OTCBB) that require no detailed reports for public posting.
Without this valuable information would be very difficult for an investor to the correct and fair trading decisions to make, and often inappropriate guess may result.
Bribery and fraud
It is not common shares, to help people who were paid for it. You may have received a spam e-Mail too well to true, which encourage to invest in a particular penny stocks, may be. Account of the successful companies today launched often on penny stocks.
A common scenario is the bribery and fraud, which companies to buy certain shares and then spread people say that certain stocks in the market can do well. Many readers then respond by investing in stocks to shoot caused sharp price on supply and demand. Then the scammer can its share of the huge amount of above price sell heavily down, so that many investors lose money.
Finally there is great potential for growth in a very minute shares, run a higher risk. And there are often, if you are not familiar with the background activities and information on how your investment makes are cheated to get a great opportunity for you.
If you are new stock exchange in the market, see why you wisely decide on what kind of investment and is not about what you may just seem rich. Given the fact that penny stocks might be tempting, they can provide enormous risks on your page.
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