Learning about penny stocks can be a good investment of time and effort for someone who just wants to make a little bit of cash on the side, especially those trying to learn how to make money online. However, the stock market is unpredictable, so you must be prepared for the risks associated with the investment.
We went over the risks more thoroughly in the previous page "Penny Stocks". If those risks sound like risks you can live with, then read on.
If you are looking for online business ideas, then penny stocks may be an option because much of the information is in electronic form and available online through the OTC bulletin board.
In order to get started, all you really need is a computer and a little bit of cash. That cash will go toward the stocks you purchase of course, and then possibly a broker if you decide to use one.
A broker is someone who advises you about which stocks to purchase based on market information. Just make sure that you choose a broker who has a good reputation because some brokers are guilty of unethical business practices like the “pump and dump.”
Not very much time is needed to invest in penny stocks, especially if you are having a broker do all of your research for you. If you do the research, it may take you a few hours per week.
If you think investing and continuous learning about penny stocks is for you, then you might consider purchasing or downloading some software to help you, especially if you won’t be using a broker. However, this is not advisable because most of the programs out penny stocks that are available are nothing but scams. There is simply no easy substitute for research.
The amount of money you need to start is completely up to you. Of course you’ll need extra if you use a broker. Brokers are paid either by fee per stock or on commission. It’s recommended that you start at least with a few thousand dollars.
One example of a penny stock success story is Timothy Sykes, a self-made millionaire. He actually started his hedge fund at the age of 18 with about $12,000. Today Sykes offers advice and lessons to people who want to learn how to trade penny stocks. He claims to have made millions of dollars in penny stocks.
Sykes recommends SureTrader, a broker that specializes in penny stock trades. Brokers do require a certain amount of money, usually $5,000 or more.
“Stocks for a Penny” could be a good investment tool for someone willing to put in the effort needed, and also ready to take a certain amount of risk.