Penny Stocks

Stocks which are trading at a value less than $5 are generally considered as penny stocks. Many new investors are lured to the appeal of a penny stock due to the low price and perceived potential of rapid growth. But many fall into the trap of pump and dump schemes and lose a huge amount of their savings. These are few wise suggestions you should consider before you invest in your first penny stock

1. Look at companies with market cap of less than $500 million

2. Better avoid bulletin board and pink sheets. Look at stocks traded in major exchanges

3. Very thinly traded stocks should be avoided

4. Look at the fundamental value when driving your decisions

5. keep it low. never more than 10% to 12 % of your total portfolio.

Happy investing!