How to Buy Global Penny Stocks
Penny stocks, also called micro cap or small cap stocks, are inexpensive stocks that sell for $1 to $5 per share. You will usually find them in young, newly formed companies or companies that are involved in risky ventures. While buying penny stocks is not particularly complicated, there are a few rules.
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Instructions
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Invest no more than 10% to 12% of your investment money in global penny stocks.
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Choose your penny stocks from popular industries; high-tech and bio-tech industries are good choices. If you pick one of these, find out what kind of exclusive technology and patents the companies own. You should also find out who their customers are by examining their customer base.
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Learn about your chosen stocks' balance sheet. It will tell you if the company has enough cash and assets to keep its head above water for the next few years. You should also know if the company has a lot of debt. Once you've assessed the balance sheet, your homework is almost done.
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Make sure the penny stocks you choose aren't involved in a "pump and dump" scheme. The schemer buys a large amount of a stock and makes extravagant claims about it to the public. As soon as people start buying up the shares, the schemer dumps the stock. Sites like WiseGeek do a good job of keeping consumers aware of penny stock fraud.
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Go to a stock broker or visit an online brokerage to buy penny stocks.
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Play it safe when it comes to pricing stocks. Always stay in your financial comfort zone.
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Keep up with current news on your chosen penny stocks; tech companies may have come out with a new product you should know about.
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Tips & Warnings
When dealing with the stock market, remember to take it slowly, use discretion and trust your common sense.
