Personal Money Management 101

• Penny Stocks (Penny Shares) are low priced (typically <$1 or £1) shares in small / start-up companies.
• Small changes in price represent large percentage changes
• High risk, but high potential growth (and - of course - losses).
  • Expect to take some losses as well as gains.
• Markets may be less liquid -
  • may not always be able to buy and sell.
  • higher dealing charges, bigger spread (difference between buy & sell price).
• Things to watch for :
  • Asset rich stocks, ie net asset value exceeds share price;
  • Recovery stocks, stocks that have been through hard times but have taken steps to turn things around, eg appointment of new management;
  • Technology stocks, eg Internet or biotechnology. IT stocks have not fully recovered from the 2000 dotcom meltdown - but the 'net isn't going to go away. By being selective and identifying future winners big gains can be made.
• Beware of brokers trying to push you into buying stocks
  • they might be genuinely helpful, but
  • they could be trying to make a quick buck by offloading stocks they bought cheap.

More details on penny stocks:

smallcapcenter.com Comprehensive coverage of small caps and financial markets offering small cap news, in-depth research tools, technical analysis, portfolio manager, message boards and more.

Penny Stocks Network Free research and analysis on penny stocks and their markets.

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