Friday, March 18, 2011

The Best Penny Stocks Entail Certain Advantages And Disadvantages

The share market is lucrative to no end as it offers high returns on investments. A number of stocks and shares can be availed from this 'market' in order to help people earn extra money. A common type of stock is the penny stock. These stocks are widely criticized in the stock market as they are subject to a number of advantages and disadvantages. For one, the best penny stocks can be availed at low prices ranging from one cent to five dollars. In UK any stock which is priced below a dollar's worth is called a penny stock, whereas in US the rates of pennies may go up to a maximum of $5.
The best penny stocks are issued by any renowned or established company when it is at its height of growth and the top profilers wish to conduct major structural changes in the taxation sector, or the profit dispersing process. However, others might be issued when an organization wishes to meet expenses on the aftermath of a huge expenditure by collecting publicly offered funding.
The best penny stocks to buy can only be determined by experts who have dabbled for quite some period of time in the stock market and know the trends. A novice in the field of investment cannot be acquainted with sufficient information about the best pennies to buy. This is because investing in this type of stocks involves a certain amount of risks. One can never know when the prices are liable to fluctuate for sure and this is one major disadvantage that stocks leave customers at.
These pennies can be bought in bulk without involving any amount of hefty expenditure. If the value of the shares increases, the profits are huge. However, the reverse may happen as well and a large amount of loss can also be incurred. The best of such stocks offer the scope to a first time investor to train himself in the art of investments without spending too much money. This is a huge experience for a fresher.
Best penny stocks to buy are those which are valued at less than two dollars. It should be kept in mind that the stocks which incur negative income behind every share should not be invested in. Stocks belonging to the companies which experience a rise in the economy should be invested in. Great care needs to be taken while investing in the shares.

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