penny stocks

[ExtinctFire]

Hello guys, Ive been intrigued by the idea of penny stocks. i only have a relatively small amount to invest but its intrigued me, i like the look of the penny stocks from doing some online research but dnt know where to get started, can anyone help?

thanks

 

[andav]

Good luck! Penny stocks may look attractive but there's always good reason why shares are so cheap.

Also trading penny stocks is also more expensive than most stocks due to the bigger proportional differences in the buy and sell rates offered

 

[ExtinctFire]

thanks blue, i dont have the first clue about stocks if im honest, its just something thats interested me for a while now. do you actively see a list of companies selling stocks or something? i wonder this because there must be billions :|

 

[Jaykay]

Unless you know what you are doing, penny stocke are a fabulous way of getting rid of all that unwanted money you have in the bank.

Seriously, play without using real money for a bit and look out for the huge difference in buying/selling prices and the relatively huge commission charges made by the brokers.

 

[ExtinctFire]

Unless you know what you are doing, penny stocke are a fabulous way of getting rid of all that unwanted money you have in the bank.

Seriously, play without using real money for a bit and look out for the huge difference in buying/selling prices and the relatively huge commission charges made by the brokers.

thanks for the advice, how do i do this? is there any other online stocks that are safer then? seems penny stocks are dangerous due to being from smaller companies

 

[andav]

Honestly unless you have insider knowledge (illegal) or lots of cash you can afford to lose you're very unlikely to make much money trading penny stocks.

In terms of educating yourself on this a good place to start is this book http://www.amazon.co.uk/s/ref=nb_sb_noss?url=search-alias=aps&field-keywords=learn+to+earn&x=0&y=0

 

[ExtinctFire]

thanks again blue, will order that book. like i say its just something thats always interested me, i dont work in the field or anything, just wanted it as a hobby really.

 

[sanjiv]

I have never traded on the stock market but I have been speaking to someone who used to buy and sell stock as his career and made a lot of money from it. He is now retired at the age of 35 and I asked him about his view on penny stocks. He said from his experience it is not worth it. There is a reason why they are so cheap.

 

[iridessa]

There used to be a circular on this...not sure if it is still going...the Penny Stock Guide.

I think your main problem if trading in small quantities will be the costs of buying and selling as there is usually some minimum transaction or admin fee.

 

[Digital Ark]

Penny stocks usually lead to you losing money. Liquidity is poor, spreads are wide (difference between buy and sell price can be 25% plus), movements are disproportionate to news flow.

There are some like RBS that are technically a penny stock that is a slightly different case.

If you do go down this route it is better to buy around 10 as 3 - 4 will be wiped out, 3-4 will move very slightly and you may hit 2 stars with long tails.

Happy investing.

 

[WPsites]

Penny shares might look cheap because of their price but it means nothing. A company with a share price of 5p can quite easily consolidate those shares and be priced £1 next week. At the end of the day that company is still the same low valued company it was last week. Like Digital Ark said, the costs for trading in AIM shares can be massive. Id say stay clear or play for fun if you have too much time on your hands but when you play for fun bear in mind that real world investing has added costs that will wipe out profits.

If you haven't got much to invest and no experience of investing then I would stay clear. Invest in your self or create your own business that is in your control

 

[Galmac618]

RBS and Lloyds can fall into penny stock bracket now. They may be worth a punt, give them a couple years and could give a god return. Just remember to only invest money you can afford to lose. And with company stocks you need to do a sounds analysis of the companies fundamentals. If you've no experience, gearing is a big one to look at, high gearing is going to mean is high risk stuff as they are carrying a lot of debt in comparison to their total equity.

 

[qul]

play fantasy shares first: http://www.bullbearings.co.uk/. (although behaviour & decision making process in real life will be different when its real money).

having worked with AIM listed plcs, its amazing the amount of hype and rubbish people come out with on investor forums, and from the RNS announcements from the companies themselves. Unless you have insider info as mentioned below, it really is pot luck and random with a lot of these companies. The share price can fluctuate based on news/results, and at the end of the day from a small investor's point of view, there's 50% chance it could be good or bad news. I've also seen companies fail and investors lose everything. So definitely some good advice below to get a portfolio to manage the risk and maybe get a winner. Oh crap, just realised the OP posted back in Feb'10, nice.