Penny stocks, or cent stocks, or micro cap stocks are purchasable shares in small businesses that are trading at low prices. In America this low price is defined as anything below five dollars; in the UK the limit is up to one pound. Some of these shares trade for fractions of a cent. Small investors are lured into playing the market by the attraction of low prices and the promise of massive potential gains. Before investing any money, you should do plenty of research. There are countless numbers of promoters claiming to offer you the "next big thing". Remember that they are not doing this out of the kindness of their hearts. Your best source of advice could well be from the best penny stock newsletter.
The market is highly volatile and dangerously open to manipulation. Many promoters use newsletters as a means of running "pump and dump" schemes. Share prices are artificially inflated by hard sell touts who put misleading or false positive statements into their newsletters to drive investment into companies in which they own stock. As this investment pushes up the value of the shares, they sell quickly for big profits, leaving the duped investors with worthless items that they cannot get rid of.
State security legislation, the Financial Industry Regulatory Authority and the US Securities and Exchange Commission all apply definitions, rules and regulations to the this market. However, as most micro cap shares are bought and sold through over-the-counter bulletin boards (OTCBB) or the "pink sheets", means that these companies need not file information to the SEC. The public are largely left in the dark and at the mercy of con-artists.
The popularity of the web and especially social networks means that such kinds of micro cap stock scams are perpetrated more easily. There is less accountability and regulation in this kind of trading than on shares sold on the major exchanges. Information in newsletters often derives from questionable sources.
Smaller investors can be easily lured into "penny-baited traps". Spam, newsletters and e-mails are sent out by "investor-relations specialists" employed to advocate the company's cent stocks. Most dubious newsletters have disclaimers about this practice hidden in the small print.
Free internet tips are in general presented by touts paid by a certain company to pitch their particular product and to generate interest in that company. Just about every newsletter in this suspicious industry tells lies. Hardly anyone is trustworthy; the shady reputation of this shaky market is justified; cynicism is warranted.
A decent newsletter does not only advise which stocks to invest in, but also tells you when the time is right to sell. The majority do not charge for subscriptions, so enlist with several and make comparisons before beginning to invest in their recommendations. Test a few free online tutorials for investors.
Uncovering the best penny stock newsletter demands research into online reviews that include independent statistics. There are many great apparatus offering daily performance news on many newsletters, permitting you to find the ones that genuinely select successes. Only lay out what you won't miss in any gamble when dealing with this rather questionable practice.
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