Investing in Penny Stocks

Investing in Penny Stocks (define as less than $1 for each share) is a viable investment tools for those people who are just starting out to work, and wants to invest in stocks .

New investors have to realise that when investing in penny stocks, the risk is larger compared to investing in blue chips. And the risk is higher if you want to make a fast buck from it.

Young investors when investing in penny stocks should take a long term view of it and the objective in investing in penny stocks is to discover the next Starbucks or Google thus getting a "10-" or even "100-" baggers as defined by Peter Lynch at a very low price.

Because of such an objective, one has to learn the following before deciding which business to invest in and purchase its stocks.

1) Accounting
2) Business Model, mainly how it does its business
3) Management Experience

All these are important if you want to find out the next BIG THING. As Warren Buffet mentioned before, when you purchase a stock, you are interested in owning the business, and you do want to own a profitable business, I presume.

For more information on stocks investing, please click here.