I've recently become interested in dropping some hard earned dollars into penny stocks, the concept sounds good to me and the risk levels are fairly low. Anyone mess around with these things? And if so, any pointers? Penny Stocks are generally thought of as shares under 5 or 3 dollars so called microcaps, which actually have been performing fairly well with the Russel 2k up for the year. My biggest unknown about these things is holding the actual, physical shares and how they are transfered, with prices at 2 per share, brokers fees are murder on these things while one waits for them to grow or collapse.
Ive dabbled in them but I havent done real well with those. The good side is your loses are minimized and there is little incentive for people to short the stock. The bad side is that these companies fail seemingly at a higher rate. My best success has come with stocks that have growth potential and havent yet matured; ones generally in the 8-12 dollar range that have started to grow but probably haven't peaked yet.
Well my broker is my dad so I cant really answer that because its not like they were ever more then a short drive away from me.
as for fees, i think i'll be going with zecco in the future: http://cashmoneylife.com/2009/01/21/zecco-discount-brokerage-review/
Interesting, I was looking at ING but they are not set up in a very efficient manner and they limit the choices one can make in stocks to purchase.
you arent gonna get rich off them, unless you get into an emerging industry, them they get out of teh penny stock status. Not an expert by any means but my cousin is a manager of a brokerage firm in Atlanta and he says that they are relatively low risk, but generally reward is moderate.