investments?

Question

how do i even begin to invest say in penney stocks?can anyone help me honestly. im older not alot of money.

Answer 1

If ypu are older and don't have a lot of money, then penny stocks are not appropriate investment choices for you. They are very volatile, and you could quickly and easily lose your investment. The bid ask spread on a penny stock is very often 25%, meaning that you have effectively lost 25% of your money as soon as you complete the trade. You should find a financial planner to help you identify a more appropriate way to invest your money.

Answer 2

Searching out "penny stocks" takes two separate paths. One is fairly straight forward, the other is considerably more risky, like hunting in the dark.

First, remember that stocks which have very, very low prices sometimes deserve to be cheaper than dirt.

Second, remember that the stock market is enormously broad and not everyone gets noticed, so there are bound to be good but ignored companies in there.

Third, today, in most places, we no longer have the penalty of odd-lots (additional commissions and delayed trading as odd-lot brokers tallies up little order of 12 here, 23 there and 62 somewhere else in order to buy up a hundred shares). The last block of stock I ordered, asking for a full 100 shares of something, came to me in two pieces within a minute of placing the online order. The computer does the matching in many cases, right away. That said to say this, if you are buying a penny stock because you can afford $100 of xyz company selling at $1 or less, you can afford 40-odd shares of, say, GTW, which is a distinctly better company, though still cheap.

That is what brings me to the two paths. Going to the exchanges, you can shop for bargains among the crumbs. I once bought Nortel when it was close to 50 cents a share. It had been on hard times, the market was radically against it, but it still had some $8 billion in cash (publicly available financial data--this is critically important), so it was worth more than the market was saying. When it rose to a couple of bucks, I sold (it is well above that now).

Not every company that is cheap deserves to be that way. Their business may have picked up, they may have fixed what was wrong, they may have gotten some new resource or method. When you find that, go for it.

But there are those shots in the dark, also called "penny stocks" and they don't always give the full financials details. Then you look for something that they do superlatively well. This is really, really risky, but try this: search the indexes of market sectors that are going great guns. For instance, if you do a search of coal companies that have had great growth in market price, the little 3 cent companies will sometimes bubble to the top of the list. Watch those lists. When the minnows start rising with the tide, pick a good minnow that seems to be swimming faster than the others. It will take a lot of looking, more than I usually have patience for, but that, like fishing or hunting is what you watch for.

Search for it and you might very well see something some day that says, "This looks good" and that is when you shake loose some extra money (certainly not the rent or grocery money, unless you were planning on blowing it on lottery tickets or beer, then penny stocks will seem like an absolutely brilliant idea). Good luck on your hunt.

Added: let me give you a hint of something I did recently, as an illustration only. AQCI had been selling in the 2-3 cent range rather firmly. I bought a few hundred shares in some spare change money in my account (it was just sitting there and I wasn't otherwise planning on using it since it was too small for the other stuff I was doing). It was about 2 cents then and is 3 cents now (that is a dollar for every hundred or 10 dollars for every thousand shares you own). The price dropped to 1 cent a share during one day of trading (April 9). That was a moment, had I been watching, when somebody either sold something in desperation or plugged in the wrong number on their order. Even then, buying at a penny and watching it go to three, you have to have good timing, to find the anomalous lows, and still need to put in enough money to make the trade worthwhile without becoming the market mover that jumped the price immediately back up to two cents that day. It is complicated, but it does happen, yet you won't get it if you don't watch. Now in the case of AQCI, there is an advantage of information on the company. A mickey mouse outfit that was dredging up fallen or submerged (as in a new lake) tree trunks to make lumber from it--no big deal. But they bought half interest in a working oil field. If the price of oil starts bumping up again, their value simply has to climb. They are no Exxon or ConocoPhillips or Chevron, but for someone with little capital, it could give you a good bit more excitement in holding. Still, for most folks, including retired people on pensions, look at things like Chevron for the bulk of your investable funds, but look for folks like Aquacellulose (AQCI) in your spare time for fun.

Answer 3

Penny stocks are not a good investment. They are too risky. The older you get the safer you need your investments to be.Try mutual funds. You can invest small amounts of money ( my husband and I do $50 a month and you are diversified because each fund owns dozens of different stocks.

Answer 4

Get an online broker, www.tdwaterhouse.co.uk