How do I Find Penny Stocks?

Malcolm Tatum

Finding and choosing the right penny stocks can be a wonderful way to begin investing with relatively little money. Stocks of this type are generally offered for sale at under $5 US dollars (USD) per share, making it possible to purchase a number of shares, hold them long enough to generate a return, then sell them before the price per share begins to drop. While it may seem difficult to find penny stocks at first glance, there are several ways to locate the right ones, qualify them for your investment purposes, and secure them with relatively little trouble.

Penny stocks trade for under $1 US Dollar, or even less than a penny.
Penny stocks trade for under $1 US Dollar, or even less than a penny.

One of the easiest ways to find penny stocks is to work with a broker or a similar investment professional. This provides easy access to stock offerings as well as some background on each of those options. By helping the broker understand what type of return you want to generate and in what time frame, he or she can help you identify penny stocks that are more likely to provide the results you desire. You can then look over the options, consider the relative merits of each one, and make your selection.

For investors who are more comfortable, it is possible to find penny stocks using online resources. There are a number of forums and message boards devoted to this type of trading activity. By joining these groups, you have the opportunity to not only locate viable stocks, but also get some feedback from those who have personal experience with those stocks.

Along with forums, you can find penny stocks by reading stock newsletters or subscribing to stock blogs online. This is often helpful, in that you not only have the chance to learn about new penny stocks coming into the marketplace, but also get some idea of what experts are projecting will happen with the price of those stocks. Since many people buy penny stocks with the idea of holding them for only a short time before selling, it is important to have some idea of how a given penny stock will perform once it is released. This includes knowing when the price will reach a plateau, then begin to decline. Buying before the upward price movement begins and selling just before the plateau is reached can result in turning a decent level of profit.

Keep in mind that once you find penny stocks that seem to fit your needs, it is important to qualify the stocks before placing an order. As with most other investments, you want to know the background of the stock, including how it has performed in the past under various market conditions, the financial stability of the issuer, and the prospects for future growth in the short-term. If you consider all these relevant factors, the chances of choosing the right penny stocks and generating at least some return are greatly enhanced.

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