Penny stocks have created more overnight millionaires than a majority of the other investment opportunities. If you want to be one of these overnight millionaires you need to be a risk taker, have a large bank account to fund your ventures, perfect timing, and know how to pick the best penny stocks.
As with any investment opportunity, there is no such thing as a get rich quick shortcut. But there are people out there that will try to sell you just that.
Be on the look out for the following tricks and techniques when looking to invest in penny stocks and avoid them at all costs.
Be weary of phone calls from telemarketers with the latest and greatest, must buy now, hot penny stock tip. Your trustworthy and legitimate stock companies usually don’t use telemarketers to sell their stock. If you get a call from on of these be careful, don’t buy anything from them. If you are interested in what they are selling get their company information and check them out.
Don’t fall victim to high-pressure tactics that promise overnight financial independence. Also be careful when the telemarketer tries to be your friend. They are just trying to gain your trust and confidence that they are looking out for your best interest. Then, when they have your trust they offer you a “hot penny stock” that they promise will make you a fortune. Most of these stocks are more often then not worthless.
Along with the hot penny stock, you also need to avoid low volume stocks. These are stocks that are not trading with any significant volume. With low volume stocks you will be unable to buy or sell the penny stocks at prices that are advantageous to you. Avoid low volume stocks that are advertised as the next hot penny stock.