FAQ
Frequently Asked Questions
What are Penny Stocks?
While there is no one correct or legal definition of a penny stock, the Securities and Exchange Commission (SEC) refers to penny stocks as a low-priced (below $5), speculative securities of very small corporations. A penny stock is generally traded over OTC (Over the counter) through quotation services such as the Pink Sheets or OTC Bulletin Board.
Why Buy, Sell or Invest in Penny Stocks?
Penny stocks are just like any other stock in that they represent a share of ownership in a company. Because penny stocks are low priced stocks, often trading on lesser known or followed exchanges, that are often not followed closely by Wall Street. Often Wall Street Institutions and Mutual Funds are not allowed to own stocks that trade under a certain threshold, for instance, $5. But just because Wall Street do not follow or own these companies, doesn’t mean they shouldn’t be invested in. Early investors in many penny stocks have amassed fortunes when these once small companies grow and the share price skyrockets with it. Remember, companies like Apple Inc were once considered penny stocks.
How can I find the Best Penny Stocks to Invest in?
We always caution our readers on taking advice from snake oil salesman pretending to be Wall Street Analysts. Just as bad is getting the “next hot tip” from a colleague or neighbor. When it comes to investing in penny stocks, or any stock for that matter, you need to do your research. Thankfully, we at Penny Stock General take the guess work out of it for our members. We spend countless hours researching company reports, financial statements, filings, press releases, and even the chart technicals. Once we have narrowed down a particular stock of interest, we will alert our members to it, and urge them to follow up with their own due diligence.
Where can I Buy, Sell or Trade Penny Stocks?
Most online brokerage firms will allow you to buy and sell penny stocks. Examples of reputable online discount brokerage firms are Scottrade, TDAmeritrade, Etrade, Charles Schwab, Trade King and Speed Trader. We use, and highly recommend, Interactive Brokers and ThinkorSwim.
Are Penny Stocks Safe to Invest in?
All investments, by their very nature, involve risk and you should always consult with your registered investment advisor or stockbroker when considering suitable investment opportunities. While considered more speculative than other investments, penny stocks also provide the opportunity for substantial returns.
What Type of Stocks do you Alert your Members to?
We alert our members to penny stocks listed on the OTC, OTCBB, NASDAQ, AMEX and even sometimes the NYSE. We often focus on OTCBB listed companies that we believe have both short and long term potential. Some of the things we look for in penny stock companies are: an experienced and proven management team, goods and/or services with excellent potential, emerging growth sector, existing contracts or clients, proven track record and much more.
Are you compensated for providing alerts?
We are occasionally compensated for alerting our subscribers to a particular company. However we alert our members to many more stocks that we have not been compensated for. At the end of the day, our goal is to deliver superior returns to our members, compensated or not.
It is worth noting that we often turn down companies that approach us for various reasons such as we do not believe the company has growth potential, or because we cannot verify the management’s experience or intentions. In short, we only accept compensation from a company that we have researched and believe has the potential to provide our members with substantial opportunities both for short and long term returns. Whenever we do accept compensation on an alert, as required by the Securities and Exchange Commission (SEC), we’ll disclose who paid us, the amount, and the type of payment within our email and/or website disclaimer.