Killer Penny Stocks

I came across a site called Killer Penny Stocks today. I hadn't heard of it and thought I would check it out. It's hard to tell if it is any good because the main page is just a landing page that asks for your email address. I put in my email address to see what happened and I've been added to their list. While it is possible I may get spammed, it wouldn't be the first time. So, we'll see.

I'm not sure the huge fascination with penny stock market investing in general, I guess it's because of how cheap they are. But for the most part, you are taking a larger risk by investing in them and here is why. First, large institutions are prohibited from buying them. What that means is that the big money which makes the vast majority of stock purchases will be no where to be found to by the stock from you if on the offhand chance it goes up, which it most likely won't.

Second, these hot penny stock sites you see, the emails you get and the faxes you receive promoting them are nothing more than advertisements to find buyers and create a market of people they can unload the stock to after they have ran the price up. Once you get in and they get out, there's no more demand for the stock and it drops in value. This leaves you holding the bag. It doesn't mean that there aren't opportunities to make money, it just means that its not very likely.

The people that make the big money in stocks are buying stocks that are over $15 dollars per share. When you buy a quality stock, you have to expect that you'll have to pay more but the potential returns are greater.

The next time you get a list of the best penny stocks or penny stocks to watch, I suggest that you toss it in the trash. Because the only killer stocks you are likely to find are the ones that kill your portfolio.