Penny Stock Lists – Your Trading Profits Start Here
For many average Joes, investments in blue chip companies through their stocks are out of the question simply because of the large sum of money required. In most instances, you cannot even buy a single share of stock in these companies as minimum requirements running up to thousands can be the norm. Fortunately, even the average investors penny stock lists will be able to scan the penny stock lists, choose the cheapest but still relatively reliable investments in the bunch and then invest as little or as much as their risk capital permit.
First, we feel that the concept of penny stocks must be explained lest dangerous misconceptions about the investments develop. Penny stocks are not exactly worth pennies although when compared to the prices of blue chip stocks, these are indeed pennies to the dollar. Instead, penny stocks are defined as any stock worth less than $5 per share, or issued by companies with less than $50 million in capitalization.
Where to start looking
You will be able to find penny stock lists in many venues of the stocks markets. First and foremost, the New York Stock Exchange hosts a few of the microcap companies although you have to do a little sleuthing work to find them since the blue chip companies rule this venue.
You also have the Nasdaq Small Cap stock market. It operates alongside the mainstream Nasdaq so much so that monitoring your investments in both boards is made easier. And then there’s the American Stock Exchange (AMEX) that, like Nasdaq, enforces strict reporting requirements and regulatory measures.
The most well-known venues for penny stocks are the OTC-BB and the Pink Sheets. We must emphasize that although these venues are legitimate sources for penny stocks, their main disadvantages of lack of strict reporting requirements, lack of stringent regulatory practices and even of lack of close governmental monitoring makes for higher investment risks for traders.
How to use the list
No matter from which venue the penny stock lists were secured, the most important thing is to be able to separate the good from the bad investments in said lists. In fact, you may be able to purchase penny stocks from the OTC-BB and the Pink Sheets that prove to be profitable upon selling. In the same way, the Nasdaq and the AMEX can host companies that appear reliable investment on appearance only to be a losing proposition in the end.
In short, you must do your research, do your analysis and do your calculations before investing or trading in any of the penny stocks on the list. Yes, you have to perform these pre-investment activities even when the so-called gurus of penny stocks recommend companies as good investments. In the volatile world of penny stocks, one man’s word can be another man’s downfall.
Indeed, penny stock lists are only as good as the way you use, apply and analyze their contents. In the end, it will be your careful research, bank of investment knowledge and investment approach that will make or break your penny stock investments as these relate to your wealth-building activities.