I recently have been slowly and slightly familiarizing myself with the stock market. I have heard negative and positive things about the penny stock market..What can someone tell me about it and how difficult or easy is it navigate through buying and selling, or is it just a bad idea altogether?
2007-07-30 20:41:39 · 2 answers · asked by Anonymous in Business & Finance ➔ Investing
Penny Stocks are a great idea after you've been actively trading (that's trading... not investing) for 5 - 10 years. Even with that level of experiance, don't do over 2% of all your assets (split amoung many penny stocks).
Newbe's tend to be attracted to penny stocks. It's the very last place to be (actually the next to last place to be. Forex, Options and Futurers are worse).
Learn investing not gambling.... READ READ READ
2007-07-31 00:03:57 · answer #1 · answered by Common Sense 7 · 0⤊ 1⤋
I am pleased you are dipping your toes in the markets but penny shares will give you frostbite!
Penny shares are highly illiquid which means you cannot buy or sell them easily and the bid/offer can be very wide.Contrary to what you might read or hear investors do not make money on penny shares.
Most beginners think that as you buy 10000 shares for one penny each [approx. £ 1000 ] you have bought a lot of shares and if they rise you make more money than someone with 500 shares. 5% of £1000 is £50 whether you have 10000 shares @ 1 penny or 500 shares @ £ 2.
2007-07-30 22:47:39 · answer #2 · answered by katerschenko 3 · 0⤊ 1⤋
Its a risk, you buy low value shares and unless you have some knowledge that something will happen you sit and wait for your number to come up. There are some sites that give advice on movers such as motley fool. Worth dipping your toe with spare cash if you keep looking your eyes open for good tips.
2007-07-30 20:53:34 · answer #3 · answered by Barbarian 5 · 0⤊ 1⤋