The Best Penny Stock Millionaire Review & Bonus - Tim Sykes Reviews

When investors buy stock, they are buying a piece of the company. While most people envision buying into big names on the NYSE , AMEX or NASDAQ, there are traders out there that prefer to try their luck with penny stocks. The term penny stock can be a bit misleading, and therefore needs some clarification. Penny stocks really are not worth a penny, but they are fairly low in value. While some analysts may classify any stock under $5 a penny stock, more analysts prefer the term to define stocks being traded below the $1 mark. Penny stocks are a great segue into trading if investors have either little cash or market experience.

Penny stocks are further dichotomized into two sects: OTC (over the counter) penny stocks and pink sheets. OTC penny stocks are usually brand new start up companies with little capital; they have the element of potential on their side. Pink sheets, on the other hand, are stocks that have already gone under, either because of bankruptcy or they are liquidating; generally, pink sheet penny stocks come from companies that are hanging on by a shoestring, just waiting to be bought out.  Regardless of which type of penny stock an investor chooses to buy, they all come with their own set of risks and rewards.  That is what the Penny Stock Millionaire trades.

Pros of Trading Penny Stocks

• There is a lot of potential in penny stocks. In fact, some of the world’s largest stocks traded today started out as penny stocks (Xerox, Delta and Microsoft just to name a few). Imagine the returns for investors who picked shares when these corporations were penny stocks.
• Penny stocks are traded because of their ability to turn a quick profit. A penny stock can skyrocket in as little as a few weeks, sometimes as quickly as a day. In other words, penny stocks can be a great short-term investment.
• The risk is as big or small as the investor makes it. Buy 100 shares or 10,000 shares of penny stocks. The fewer shares an investor buys in to, the lower the risk; however, the more one buys into, the greater the potential profit.

Cons of Trading Penny Stocks

• Penny stocks are traded on pure speculation. Forget reading market reports and analyses. Penny stocks are unpredictable and extremely volatile.Investing in penny stocks is the equivalent of showing up to a horse race full of either brand new race horses (OTC stocks) or some that won in the past, but are looking a little run down (pink sheets).
• Penny stocks are considered low volume trades. What this means for a potential investor is once the stock has been bought, and it comes time for the investor to sell it (regardless of reason), it may be difficult to find another buyer out there. If there are no buyers willing to take the shares off the investor’s hands, then said investor is stuck with the penny stocks.
• Just as a penny stock can grow in the hundreds of percent range over only a day or two, so can the stock fall. For example, penny stock bought $0.70 could drop just $0.35 over the course of a few days. For a stock that trades for double or triple digits, it is not much of a loss. But with penny stocks, an investor just lost half of his initial investment.

Just like buying into any share of stock, regardless of which market it is traded in, there are certain risks investors assume.  The main difference between trading big name stocks with penny stocks (other than the price per share) is there are no surefire tricks to the trade; some stocks might catch a big break while others tank. The amount of risk involved trading penny stocks is no different: sure, the market can be unpredictable, but with great risk come great rewards.  But with a great plan like the Penny Stock Millionaire it can become easier.

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