Trading Pink Sheets - Penny Stocks Ca...

Trading Pink Sheets - Penny Stocks Can Be Very Lucrative

By Dustin Hoffman

If you took $1,000 and put it in a savings account today in your local bank, you might make $10 in interest in one year, if you were lucky. If you wisely invested that $1,000 and put it in the average stock, in an average year, you might make $100 if you were very lucky. But, if you managed to find the right pink sheets penny stocks and invested the same amount of money, it would not be unusual for you to walk away with $5,000 or $10,000 - or more.

The return on investment when you are trading pink sheets penny stocks far outweighs the risk involved. Imagine getting 500% on your investment in a short period of time. It can happen and it does happen to wise investors every single day.

Of course, like all investing, you never want to put all of your eggs in one basket, so by only allocating a portion of your portfolio to pink sheets penny stocks, you will be much safer. Some experts say that 10% or less of your portfolio should be in small cap stocks, or stocks that trade at less than $5.00 per share. But, if you can pick your pink sheet penny stocks wisely, you can multiply that money much faster than the rest of your portfolio.

When you are looking for a penny share, the pink sheet and over-the-counter are the two primary places to look. In the past, there has been one overwhelming problem with trading in this area and that is that the companies involved were largely unregulated. You may have been buying shares in a shell company, or one that did not really exist, but was well-hyped. Especially in this internet age, there are many companies out there that do not really exist, yet people trade their shares. This is a dangerous game.

So, when you are looking at pink sheets stocks, you need the proper guidance to make sure that the companies you are looking at are legitimate and have a true reason for making such a dramatic move to the upside. Pharmaceutical companies, energy companies, and internet companies are well known to move very quickly and dramatically from penny stocks to large cap - almost overnight. And, if you are on for the ride early in the game, you will make more money in this sector of your investment portfolio than in any other area. A good way to accomplish this is by subscribing to a good penny stocks recommendations service.

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