Buying Stocks Under $1

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Stocks that cost under $1, known as pink sheet stocks or penny stocks, are risky because they don't have as high of reporting standards to the securities and exchange commission. Learn about rates of return for stocks under $1 with help from a registered financial consultant in this free video on investing and money management.

Part of the Video Series: Investment Basics
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Video Transcript

This is financial adviser Patrick Munro talking about buying stocks under 1 dollar. These stocks are often referred to as pink sheet stocks or discounted stocks, penny stocks and you have to be very careful about these stocks because they are under capitalized, there's very little money underneath or supporting them and they don't have as high as a reporting standards to the securities and exchange commission. That being said, if a company is emerging in the pink sheet arena or the over the counter arena is also another term, OTC, for stocks under 1 dollar. They can explode up to 4 dollars for a share and then you've got a significant winner on your hand because these smaller stocks have a greater opportunity to grow hyperbolically but they can also disintegrate down to nothing and there goes your investment. So it's all about risk and it is possible to really get involved in some great rates of return when you're buying stocks under 1 dollar. This is financial adviser Patrick Munro.

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