4 Myths about Penny Stock that you shouldn’t Believe
Investing is one way of getting additional earning for a company. Although many companies typically invest a huge amount of money, there are also companies who venture on micro-cap stocks like penny stocks. If you are new in the industry of stock market, you normally wouldn’t know that these stocks are actually traded with just less than $5. Well, for those who have been in the business, they have a general idea of what penny stocks are. But, not all of us have the same concept about these stocks. There are misconceptions that you as a future investor should know right now.
Penny stocks are hard to buy and sell There were instances that penny stocks are hard to buy and sell. Investments trading OTCQX, Pink Sheets and OTC are very good examples. But, these aren’t just the trading markets that investors can take part. Markets like NASDAQ, New York Stock Exchange, Bulletin Board, and American Stock Exchange have penny stocks listed on them as well. The hundreds of thousands of shares being sold and bought each day prove that there is no difficulty in the process.
Shares can’t go much lower Investments are a risky decision. Once you got in the game, you have to strive hard to keep up with how the stock exchange will perform. Although there will be times that you will definitely have an increase in the share value, there lies the possibility of hitting a low value at some time. You don’t have a full control of what’s going to happen. There were cases that investors can totally end up losing 100% of his/her investments in penny stocks. Nevertheless, these penny stocks have the capability to rebound.
Promising stories of penny stocks As a way to entice investors, companies acting out as penny stocks need to be creative in how they can attract them. These companies often voice out that their company can actually change the world, save lives and even make millions in a short span of time. Impossible things are quite a fancy thing for most of us which tends investors to make that investment.
It is a scam At first, you will simply be shocked and will doubt because the investment is priced lower than any other investments in the market. You can also learn that other companies who are leading to bankruptcy often falls in the penny stock territory to earn money to be able to survive. Well, these are the truth that we must be ready of. But, not all companies who are trading at a low value are those worst companies. There are companies that trade at this type of stock are often those which are undiscovered, overlooked or looking for a place to broaden their market share.
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