At times one wonder that is it worth going for a penny stock for making some quick buck. It is a calculated risk which needs to be executed after undertaking the pros and cons of the penny stock. We have analysed the same by considering that if ever one decides to go for a penny stock than he must consider following points before taking a plunge:
How to Buy a Penny Stock?
- Find your area of interest and your expertise subject and try to find a penny stock in that particular area as more or less you will be correct by virtue of your on job training and experience, you will be able to choose the best among the waste.
- Follow the past track record of Penny Stock you are contemplating to buy.
- To begin the investor should focus on an area of interest or in the fields in which he or she has an expertise like pharmacy, medical, biotech, software, retail, farming, or food service
- Use the power of networking i.e benefit from the info shared by investors, family, or co-workers and potential Penny stock buyers and it will help you to capture the insight into the stock along with trend of the stock in the market.
- Picking the right Penny Stock should be balanced against the risks as people selling penny stocks will create a hype in market regarding the perceived success and potential of the stock.
Pitfalls of investing in Penny Stocks
However in India we do not suggest you to go for penny stocks as these stocks are generally prevalent below Rs 10 or may be lying in Z or Junk category as prescribed by SEBI. If ever you get an urge to sell your house and invest the money in said penny stock, it means that operator of penny stock has done a commendable task and now onus lies on you to desist the offer
Just remember that Penny Stock investing is alluring and a mere thought of choosing a stock for becoming a multi millionaire can land you in trouble because in such scenarios greed overtakes your mind and as a net result you may be stuck for life with a dud stock. The odds are stacked against you in a penny stock trading and thus do not pick a Penny Stock with money that is not earmarked for loss as chances of same happening may be high. Thus keep the greed aside and make money daily with hot stock of the day and be happy with moderate but sure returns every day.