Slide 1: ==== ==== Discover 2 Secrets to Penny Stock Wealth- See how unemployed dad now makes up to $50,000 per month - HERE- http://tinyurl.com/6tj9jyh http://tinyurl.com/6tj9jyh ==== ====
Who hasn't dreamed of making it big in the stock market? You hear all the time about people who invested in start up companies and made a lot of money. I am sure you would have loved to have been an earlier investor in WalMart or Microsoft? The allure of this dream attracts investors to pinksheets. These stocks can be bought extremely cheap. You might be able to buy 200,000 shares for $100 or less. Then you hope that company moves forward and the shares make a climb to a buck a share, and you prosper. That can happen if you are very lucky. However, beware investing in pinksheet companies. Do so only with money you can afford to lose. First, because the price is so cheap, you might be tempted to invest without taking the time to thoroughly investigate the company and see if it has a strong basis to enable it to grow. Big mistake. These pinksheet companies are not regulated like companies offering regular stock, so first do some homework and learn exactly what pinksheets involve. The purpose here is to make you aware of something called reverse splits, which can happen with any stock but are prevalent with pink sheets. A reverse split actually reduces the number of shares you own in the company. Sometime by a lot! For example, you might own 300,000 shares of company ABC. The company decides to make their stock more attractive by reducing the number of shares it offers and making the price per share higher. So they may do a 100,000 to 1 reverse split, as an example. Let's say you have 300,000 shares and the shares are worth a total of $9. Very possible. You bought in at $100 but it is now worth $9. Well, you hope maybe it climbs to even a penny a share and you can walk away with $3,000. Originally you hoped to get rich but now you figure you will be happy to turn your $100 into 3 grand. The reverse split comes along and you now have 3 shares. Each share is now worth $3. Terrific. You still have stock worth $9, but now to even get back the original $100 you invested, your shares will need to grown to a bit over $33! That does not even take into account what it cost to buy the stocks and to sell the stocks through your broker. Well, what are your chances now of getting rich, or even making a nice profit on your original investment? Pretty much nil.
Slide 2: This happens frequently. It has happened to me 5 times so far. The example above is actually from my experience and, by the way, that stock is now back to being worth $.0001 a share. Seriously! If you are lucky, maybe the reverse split will be small and you will still have shares to work with. I have a 4 - 1 reverse split coming up, so my 20,000 shares will become 5,000 shares. I can live with that but I don't have to be happy about it. This has not stopped me from investing in pinksheets, but it has definitely made me more cautious. I know not to get carried away and buy too much from any one company and generally limit the investment to around $50 - $100, depending on what the company research shows. I think this is something you need to understand thoroughly. I've been on way too many stock bulletin boards where people had no idea of what a reverse split was. Believe me, once it happens to you, you will never forget it. To wrap it up, if you decide to invest in pinksheet companies, or in penny stocks, take the time to do your research and invest only money you can afford to lose. Do so and a loss won't hurt you but maybe you can get lucky and make some money.
Bob Blick is the owner and webmaster of the Investment Digest website. You will find lots of information and tips at this site to help you invest wisely. You will get thorough information on everything from investing to making money in foreclosures to planning for retirement and more. It is well worth your time to visit and absorb this well covered information.
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==== ==== Discover 2 Secrets to Penny Stock Wealth- See how unemployed dad now makes up to $50,000 per month - HERE- http://tinyurl.com/6tj9jyh http://tinyurl.com/6tj9jyh ==== ====
