The easiest way to purchase penny stocks is to open a brokerage account and use the broker to purchase the stock for you, according to finance site Money Morning. A broker can also help you to avoid many of the scams and frauds present in the penny stock market.Know More
According to Investopedia, penny stocks are defined either by the market capitalization of the company offering them or by the price of the stock itself. For example, a penny stock is often defined as a stock offered by a company with a market capitalization between $50 and $300 million, while the Securities & Exchange Commission defines penny stocks as those stocks that are under $5 in price.
When buying penny stocks, the most important step is careful research of the stock in question, according to Money Morning. To avoid scams, such as the pump and dump, which involves pushing a stock price upward falsely before selling the stock at an inflated price, careful scrutiny of the stock is necessary. A broker generally does this for customers, but it is crucial that the buyer does a bit of due diligence before making the buy order. Penny stocks, like any other stock, need a firm business foundation to be a successful investment instrument, so examine the products or services of the company, its general outlook and its reputation before buying.Learn more about Investing
The first step to get started buying stocks is to open a brokerage account. Options include a full-service brokerage, where a broker expert assists in stock investing and account management, or a discount brokerage, where the investor facilitates investing more independently, according to Nasdaq.Full Answer >
Penny stocks are securities generally issued by small, publicly traded companies and usually trade at a price of less than $5, according to the U.S. Securities and Exchange Commission. The low price and high volatility of penny stocks makes them highly speculative investments that carry significant risk but also the potential for significant profits.Full Answer >
To buy stocks and retire before the age of 50, rely on compounding of interest to build your funds over time, notes Steve Sjuggerud's Daily Wealth. For example, if you invest $10,000 and get a return of 18 percent, you have a million dollars 28 years later.Full Answer >
A person can start trading penny stocks by selling fast, not shorting and finding stocks that are over 50 cents a share, according to MarketWatch. Beginners can find penny stock listings on NASDAQ or the New York Stock Exchange to get started, claims For Dummies.Full Answer >