| A penny stock is a stock that is a micro cap and sells | | | | pink sheets with the information it can appear on |
| for one dollar a share or less. The term micro cap | | | | OTCQX a higher tier of The Pink Sheets. This level |
| simply means they are small companies that have | | | | separates the wheat from the chaff. You find |
| less than $250 million dollars. Because of the diversity | | | | information about these stocks at the respective |
| among smaller stocks, a need for a more precise | | | | websites. |
| definition at the company size created a newer | | | | Most small investors like the nano cap stocks |
| division of penny stocks called nano caps. These | | | | because they are inexpensive in price. A one-cent |
| companies are very small as the name reflects, with | | | | gain on these stocks is an impressive percentage |
| capitalization under fifty million dollars. If you want to | | | | change. That's where the penny stock investor |
| trade in these stocks, it takes a lot of research to | | | | newsletter is a huge advantage. These newsletters |
| find the companies unless you use a penny stock | | | | make recommendations about different stocks in the |
| investor newsletter. | | | | micro cap arena. Some of the newspapers are better |
| Penny stocks may be listed on the OTCBB (Over the | | | | than others and give broader view about the financial |
| counter bulletin board) or be Pink Sheet stocks. In | | | | situation of the company and the products that it |
| order for a company to be on the OTCBB, it must | | | | makes. Unless you're an accountant, often the |
| report the financial data quarterly to the SEC and | | | | financials provided at the various websites need |
| provide relevant information that investors find useful. | | | | interpretation. Penny stock newsletters use the |
| Information on these penny stocks is available at | | | | available information and create recommendations |
| many financial sites such as Yahoo or Hoovers. | | | | based on not only the company but also the technical |
| FINRA (the largest non-governmental regulator for | | | | movement of the stock. |
| securities in the US.) has a page devoted to the | | | | Choose your penny stock investor newsletter wisely. |
| activity of Bulletin board stock at which is a starting | | | | It is part of the cost of your investment and often, |
| point for those that want to invest in the higher end | | | | if you follow the advice, makes the difference |
| of penny stocks. If you're a novice, you may still | | | | between a profit and a loss. Since many of the |
| need a penny stock investor newsletter to | | | | newsletters are free or a minimal cost, others might |
| understand much of the information. | | | | cost a significant amount but provide more in-depth |
| Those stocks not listed on the OTCBB but on The | | | | information. Before you begin, investing it's wise to |
| Pink Sheets instead, have not provided the | | | | take a month or two to follow the letters and use a |
| necessary information for listing. This doesn't mean | | | | faux stock account. (Your "imaginary" account that is |
| the company is not good. It can mean that the cost | | | | unfounded but you follow the potential gain or loss.) |
| of providing the governmental regulations was | | | | This gives you an idea if any of the newsletters |
| prohibitive, as it often is with a growing company. If | | | | show value and if so, which ones show the most |
| the company has regular audits, and provides the | | | | value, without causing you to lose any funds. |