Wednesday, January 21, 2009

Find Hot Penny Stock Picks And Make Lots Of Money

By Eric Wells

Most everyone has heard people tell grand stories about someone who was able to find hot penny stock picks and made themselves a massive amount of cash quickly and easily. Some of these tails make it seem like it was mere child's play. In reality, however, it is not so simple but it can be done. This article will cover some basic information about how you can find hot penny stock picks and hopefully make a handsome return.

The first thing you need to know is that penny stocks do not necessarily cost only a penny. The SEC now defines penny stocks as and stock whose price per share is less than $5. These investments often trade over the counter (OTC) instead of on the major exchanges although there are many that are listed on the NASDAQ. If you can find hot penny stock picks, then you do have the potential to make huge sums of money but keep in mind that they are also more risky than normal stocks.

As you ponder this investment option, keep in mind that many experts recommended starting out with only ten percent of your entire portfolio devoted to this endeavor. As you go about trying to find hot penny stock picks, also be aware that they do carry a greater amount of risk due to the the higher reward potential. It is very important that you mitigate this risk by only reserving a part of your entire investment portfolio for these.

In order for you to find hot penny stock picks, you will need to make sure you have first done your own due diligence. Some investors are able to make a sizable amount of money quickly with little or no effort but this is nothing more than dumb luck. Investors who find hot penny stock picks and do not do any research before determining if the company is investment-worthy are much more likely to lose their money than to make any.

Your next step to find hot penny stock picks is to hire a good broker. Many online brokerage houses will allow you to buy these shares but there are also several that won't. Be sure that you confirm they do accept orders for stocks under $5 and even under $1. If you do find hot penny stock picks, it will do you no good unless you are actually able to buy the shares.

As you find hot penny stock picks and do your due diligence, be sure you check out all aspects of the business. Management should have a good track record as well as plans to take the company forward. You will also want to make sure that the industry the business is in is doing well. If you can find hot penny stock picks that are listed on the NASDAQ, you may find that more information is available due to the regulations in place on the exchange.

Once you find hot penny stock picks and have done your homework, you will be ready to invest and hopefully make a handsome profit because of it. People do make money everyday with penny stocks but it is because they invest carefully and also know how to mitigate their risk.

One other thing to consider to find hot penny stock picks is to subscribe to a newsletter. There are a few very good ones that specialize in penny stocks and offer great picks every week or month.

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