Penny Stocks Investments

Penny stocks; you either love them or you hate them. There seems to be no middle of the road. Two terms you hear a lot when talking about penny stocks are ‘pink sheets’ and ‘OTC (over the counter)’. So what do those mean?

What are Pink Sheets?

Pink Sheets are a daily list of asking prices and current bidding of OTC stocks which do not have to worry about meeting requirements set by the security and exchange commission. Buy penny stocks may be a smart investment in these uncertain times of our overworked economy. Is buying penny stocks good for you? Something to think about according to the “Motley Fool’s Ilan Moscovitz”, is that in hard times the S&P, bonds and T-Bills are outdone by small stocks approximately 60% of the time. Frequently, by quite a bit. Most of these smaller stocks simply will not be listed on the major stock exchanges. Penny stocks online are the only way to get them.

What are Over The Counter (OTC) Stocks?

OTC stocks are sort of the off brands of stock trading. Definitely not N.Y. Stock Exchange material; the companies involved are small and not required to stick to the rules and requirements of larger companies/stocks. Another name for OTC stocks is ‘unlisted stock’. People called ‘broker dealers’ do the negotiating, phoning and emailing necessary for trading. These types of stocks are listed on the previously mentioned pink sheets and OTC Bulletin Board and are not considered to be of the stock exchange. Some of the companies listed, however; may have undesirable credit ratings. Bonds are also referred to as OTC securities.
Penny stocks can appear to some to be a get rich quick investment; but because of the lack of rules and requirements, they are prime breeding ground for scams. So… Buyer Beware.