But where to go to find the latest hot stock to make money. Well there are many different websites that offer to send stock alerts to your e-mail. These websites are nothing but a bunch of penny stock chasers. These websites (not all of them) are known to use what is referred to as a “pump-n-dump. A practice that has been used for many decades, but that is for another post.

I’ve use some of these sites to do research on the accuracy of their picks. I’ve found that in most cases, stock stock in question will go up in value by more than 10% to 50%. The problem is that the price per share won’t stay there for long. The early investors who got in on the stock before the herd start selling their shares which in turn bring the price per share down trapping the average investor in the stock or having them take a loss.

If you’re able to be home or in the office watching the stock streamer all day, you can capitalize on the situation. If you’re not able to do that, I suggest you stay away from trading in these stocks.

If you’re looking to make money on the next big growth stock, you need to find the company that will bring the next best product to the market that the industry is looking for. Right now there are plenty of alternative energy companies out there that are just about to explode. Start doing research into many of these companies to see if they have what it takes to go to the next level. Once you do, build a position in the company’s stock. The buy-and-hold strategy will pay off in the long haul if your research is correct.

In my opinion, if you’re new to the stock market and don’t have a total grasp of it all (or at least most of it), I say stay away from trading or investing on penny stocks. You can make a lot of money, but you can lose just as much if not more of your capital.

When I start looking into a small-cap company, especially one whose stock price is less than a $1.00, the research that I need to do is much more involved because the lack of analysts and other resources I would use to get my information. a few times I’ve called the company to talk with the the CEO (Chief Executive Officer) or the CFO (Chief Financial Officer) to get a feel of the management and their confidence in the direction of the company. You would be surprised how much they’re willing to talk to potential investors. Go visit their website to get their latest financial report. You’ll also need to look at their competitors within their industry as well as their potential market share.

If you’re wondering about how to buy penny stocks where you can get rich overnight, be advise that those stories you hear are mostly from these “pump-and-dump” website or brokers. Yes you can make good money if you’re quick enough to buy and sell stock (in most cases) within the same day. I’ve seen too many times from beginners investing in penny stocks see the gains, but wait too long before the Profit-takers have already sold out their position. If you are someone who can not be around the computer all day while the stock market is opened, then you shouldn’t be thinking in this type of stock trading strategy.

Another thing you have to keep in mind is not to put too much capital into a penny stock that you are not prepared to lose. So often investors will lose 75% or more of their investment in a penny stock. As with any investment strategy, you should never put all of your capital into any one sector or stock. All stocks rise and fall in value and when it comes to penny stocks, their price swings are drastic.

If you’re asking about how to buy penny stocks as in, Where do you find a penny stock broker? There are many different online penny stock brokers that you can use. These days it’s a lot easier to trade online than ever before. TD Ameritrade, Zecco, and Scottrade are just a few you can use, but make sure you read their list of fees they charge for stocks that trade for under $1.00. There are some that will have extra fees to when trading penny stocks. I wrote a earlier post about the difference between some of your choices.

Obtaining reliable investment information on the penny stock market is extremely difficult because of the scarcity of dependable corporate data in the treacherous world of the OTC and pink sheets. By the time a professional stockbroker were able to pass along important news about a penny stock, it would probably be too late to capitalize on it. Generally speaking, if the broker is strongly promoting a specific penny stock issue, he stands to benefit financially under the table, one way or another. The responsibilities of a stock broker do not mesh with the qualities of a good financial advisor. The broker is compensated for the amount of dollar volume he generates via stock sales. He is interested in generating high commission sales, not providing quality financial planning advice. He is naturally going to be interested in generating the quick buck via high commission sales, not working towards establishing a long term client relationship. On top of that, you end up paying triple the charges for receiving poor investment advice.

Stay clear of these charlatans and hook up with a reputable online penny stock broker. Generally speaking, you will not be communicating with anyone from the brokerage, unless there is an administrative question regarding an order. You will not be pestered by any salesmen looking to make a quick buck, leaving you free to perform independent investment analysis and place orders at your own discretion. You will be able to focus on the data that actually causes stock movements, such as the real time price of the issues and the commonly used pertinent mathematical ratios.

If discussing your finances with a professional is important to your peace of mind, then seek out a financial planner who charges a fixed fee for his services, and who does not have a vested interest in the actual stock transactions. The wave of the future for penny stock investing is strictly through the internet.

Acquiring the best stocks to buy is not really an easy task that you can effortlessly purchase. There are certain processes that you must undergo before becoming a successful shareholder of a company. When you decide to invest with this kind of ownership it would be best to know first the top company that you should gain ownership. You must at least have your own list of the stock qualities that has the potential to be successful against other stocks.

If a company is already well-known and sells products that are popular in the market, it means that it also has excellent stocks. This is important when buying stocks because most of the companies that already established respects from the consumers also gain huge income that will mean a success on their part. As a buyer, you would like to invest in a company that is already established good reputation to the customers that’s why it is important that the stock that you are going to buy has excellent stocks.

Another important factor that you might like to look into penny stocks to buy is the earnings per share of a company. Compare to the excellent stocks, the earnings per share is perhaps the most important factor that a future stockholder must look into. This way you will be able to determine the earnings that a company acquires each year or more. When a company has acquired huge earnings in certain period of time it only means that as a shareholder you will get huge income.

I believe most people know what stocks are. A stock’s price multiplied by the amount of outstanding shares represents the value of the company. A company’s worth can be characterized by total assets minus all its obligations. Stocks may be more or less profitable, according to the company’s efficiency and ability to return to profit for every dollar that was invested in it.

Publicly traded companies are traded on three major exchanges like the New York Stock Exchange (NYSE), National Association of Securities Dealers Automated Quotations (NASDAQ) or American Stock Exchange (AMEX). Even though quite few penny stocks are traded on these exchanges, most of them are traded on the OTC:BB (over the counter bulletin board, also known as the pink sheets.

Potential to make incredible amounts of money in a relatively short period of time, indeed, is one of the most attractive factors that attract investors to penny stocks. Because decreased listings, any change in prices can lead to one hundred times the initial investment. Some people can become rich overnight if they make the right choices.

Moreover, there is also the possibility of losing money. Penny stocks can also go down 50% or more in just one day of trading. Which is why you need to do even more research onto the company before making any investment. Unlike the big stock exchanges, stocks traded on the OTC:BB don’t require to do the same types of quarterly reports as the others. Another issue to be aware of is the fact that most penny stocks don’t have any analysts following the company to really get an idea of what they are up to. Of course you can call the company’s public relation department to get some answers, but then again you have to remember that the person you’re talking to works for the company and may exaggerate the company’s performance. As the old saying goes… Let the buyer beware.

There are several great advantages to starting out with penny stocks. For starters, as mentioned earlier, it is the perfect starting ground for new traders as they have the freedom to purchase these cheaper stocks to get a feel for the stock market. By going this route new traders can confidently test the waters and see what it is like being a trader without risks of losing thousands of dollars on a bad investment, unless of course they purchased thousands of penny stocks at once. On that note, it brings up another good advantage to penny stocks as it is easy to buy maybe hundreds of them if you have the money and are willing to risk it in that way.

Just as there are advantages to penny stocks, as in most anything, there are disadvantages as well. Since the stocks are so low cost it could be awhile before seeing a significant increase in value when just buying a few. When dealing with them one tends to need to have a lot of patience to play the waiting game which can be stressful worrying if you hit the jackpot, so to say, or if you lost everything on them. Another disadvantage can not be stressed enough as it has been mentioned several times throughout the article but there is always a chance of losing everything you invested in them so be careful! In the end it is best o do a lot of research into something like stock trading as it can be complicated at times but can also be well worth it. Just be careful where you get your information and be very wary of spam e-mails sending you free stock tips as often times they are part of a scam.

Just remember to study and learn a little bit about penny stocks to buy before rushing into it as a little bit of knowledge can help keep you safe in the stormy seas of investment trading.

As with other high-risk investment vehicle, penny stocks offer high leverage for the investors. A small amount of increase of the price of the stock can make a good amount of money for the investor. It is also very important for the investor to be willing to sit on the stock for a long period and view this investment as a long term gain.

Penny stocks are any stock that trades below $1 per share or sometimes below $5 per share. The shares generally fluctuate in value. Therefore, it is important the understand the movement of its price not only by using technical analysis but also by using fundamental understanding of the company’s assets, growth, and direction.

I would recommend that someone interested in investing in penny stocks would ask assistance from investment advisers. A good way to do it is to subscribe to investment newsletters offering investment advice. Be cautious though in choosing the newsletter that you would subscribe to. If you are on the lookout of a good investment newsletter here are some tips for you:

1. The company offers 24/7 customer service
2. The customer service representatives are friendly, courteous, and professional
3. The editors answers your inquiry either by mail, email, or fax (most editors won’t answer your questions via phone because they are constantly looking for good stocks to recommend)
4. they have good winners to losers ratio in their portfolio (6 winners out of 8 open positions is really hot)
5. And the company provides you access to the company’s model portfolio when you ask for it.

There are so many investment newsletters out there, but if you want excellence, you may want to consider the tips above.

Let’s start with the concept of someone giving you free advice on which stock to buy and when to buy it. What’s in it for them? That’s the first question that comes to mind when I think of these websites. If they send you free e-mails and don’t ask you for any money on return, then how do they make their money? To get one thing straight… getting a tip on a stock is not the way to play the stock market. You need to do your own research on the stock that you are looking to purchase. Don’t be what I refer to as being a penny stock chaser.

These websites are more designed to get others to buy into stocks that they’ve already set up a position in and are waiting for the “new” investors to jump on the band-wagon and cause the price to go up. When that happens, they will scale out of their position and leave those who are not as quick to get out before the price drops back to where it was.

In my research of these websites, I signed up for their e-mails and track how the stock moved. In many of these cases ( over 85%), I would never own or invest into any of these stocks. Their balance sheet and the financial reports of these companies did not look good. As a matter of fact, one company in particular WDAS.PK, was being hyped by three different websites. What did the stock do from the e-mails? What happened was unbelievable. The first alert was on Sunday Oct. 11th. Telling their subscribers to buy at $0.05, but when the stock opened on Monday it was at $.40. Updated alerts went on stating that the climb wasn’t over and to buy at $0.40 – $1.20 per share. I will say that those who timed it well, made a ton of money if they sold their shares around $1.85 – $2.00. It hit a high of $2.00 before closing at $1.85. In just two trading days it closed at $0.48.

During the entire 10 trading days from when they first talked about WDAS.PK, the stock went up and back down again to where the ride started at. As of this past Friday, Nov. 20th, it closed at $.20 per share. Was it good to “play” this stock tip? Only if you were able to watch the day to day activity of the stock, was it worth it. The stock came down a lot quicker than it went up. I’m sure many didn’t get out in time and suffer a loss.

My advice to you is to do your own research and not to take anyone’s advice at face value. Just because someone or some website says it good, doesn’t make it so. I know it may be harder to do research on companies that trade on the pink sheets because usually these companies don’t have analyst watching them. Some information is out there, but you have to watch for fluff articles that publicist put out to help boast interest in the company.

In order to fund these activities, they sell shares in their companies for attractively low prices in the hopes that they indeed find marketable quantities of the resource in question. In the event that they do indeed find what they are looking for, the value of the company increases by many factors resulting in amazing returns for investors. These stocks are incredible volatile for three main reasons: the first is that they are already trading in ‘pennies’ so a one penny increment can represent an enormous percentage difference in price.

Secondly, as investors await word from geophysical tests and explorations, the price is incredibly vulnerable to rumours of all kinds that one or another investor may feel is or is not applicable to the success or failure of that particular company.

The third reason that these stocks are so volatile is that they are often traded at incredibly small volumes leading them to be incredibly susceptible to buy or sell requests from speculators.

Unfortunately, these stocks are also vehicles for dishonesty and insider trading. In the case of BRE-X, for example, the stocks price increased by many multiples on news that resources were found that would result in unprecedented profits. Such news gave an incredible injection of positive will towards the company and many people invested their entire life’s savings, only to find that these results were fraudulent and that the company did not in fact have any basis for their reports, but making millions of dollars for those responsible in the meantime as they allowed their stocks to increase in value, and selling before the collapse was exposed. Caution should always be practiced when buying and selling penny stocks.

There’s a common perception that they are very risky, and there is some truth to this. The risk is not caused by the low price of the penny stocks. Many foreign exchanges typically price even their blue-chips in share prices which are less than a dollar. And because penny shares are not marginable in North American brokerage accounts – which means your broker won’t lend money against their value – they are actually less risky than stocks that trade for higher prices, as the most you can lose with pennies is your initial investment.

But there are some ways in which penny stocks are riskier than stocks that trade for higher prices if you’re not good at understanding the stock market. They tend to be smaller companies, and thus their management is not typically comparable in quality to that larger companies where the remuneration paid to executives can be much higher. Their smaller capitalizations make them more subject to insider manipulation. And they tend to be involved in riskier enterprises such as mining exploration.

In addition to the added risk, there are some other difficulties in trading penny stocks which you should consider. Institutional investors – such as mutual funds and pension funds – avoid them because they are too illiquid to buy in large quantities. This creates a problem for the retail investor as well. If you accumulate a large position in a penny stock you may find it very difficult to reduce your position. There simply may not be enough buyers who wish to buy your stock on any given day. In fact, some penny stocks are so illiquid that they do not trade every day. This illiquidity leads to another problem in trading them: the large bid-ask spreads. The bid-ask spread is the difference between the bid price and the asking price of a share.

In penny stocks it can sometimes be very large, with the difference representing a large percentage of the share’s value. With penny stocks it’s important not to put in market orders unless you’re confident that the spread is small, and that there is sufficient volume trading to fill your order. Otherwise, make it a practice only to use limit orders, and be patient. Volatility is another problem with penny stocks. For this reason you should generally avoid using stop-losses, particularly with very thinly traded issues, as you can easily be stopped out of a position simply by routine trading swings.

Penny stocks are risky, but they can also be rewarding. Returns of 100 percent, 500 percent, or even 1000 percent or more do happen. And since you can only lose a maximum of 100 percent on any single trade, you don’t need to pick a winner every time in order to make a significant return on your investment. Just be sure to limit the portion of your portfolio invested in penny stocks, and then pick a basket of them, rather than putting all of your money into a single name or two. Trading penny stocks can increase your investment returns, provided you trade them with caution, and are fully aware