How to Find Good Penny Stock Picks

Penny Stock investing is often compared to speculation. The reality is that there is money to be made in speculation. Penny stocks are a cheap way to get involved in the market which makes them attractive to many investors. While it may take millions of dollars to buy thousand of shares of a blue chip it can cost only a few dollars to buy penny stocks. One main problem with penny stocks though is that there is very little information available. Many people who might be interested in investing in penny stocks are held back from investing because they do not even know any companies they can buy. There are many sources of penny stock information if you know where to look. Some of this information can be helpful but some of it can be bad. You will have to find out for yourself if you are getting good information or bad but this article should help you know how to separate the bad information from the good.

If you search in free penny stock picks, free micro, nano, or small cap picks you will likely find some sites that offer picks for penny stocks. Often these are not very good. Some are good though, One of the ways that you can test how good a penny stock picking source is to follow the picks for a period of time at least for a couple of weeks. See what kinds of returns the site gets. Many sites that offer free picks actually lose most of the time. Sites that are good though often have forums or picks from members. If you see a member in a forum or a member that posts some picks you should follow the same strategy. You should check the numbers though do not just take someones words that their stock made so much in a day. You can look up what it did yourself. Also make sure they tell the pick the day before instead of claiming they picked a stock that did well that day.

You can also get free newsletters or even pay for newsletters that will give you picks. These e-mail picks have an even broader range of really bad picks, average picks, and amazing picks. You should follow the same rules of following a pick for a period and seeing what has the best average returns. You can often find some really smart free newsletters. You will also want to see if the sender was paid for giving the information. Many free picks simply send out information that companies pay them to add to their newsletter. Buying these stocks may or may not be a good idea. Sometimes they may trade well because of all the hype that they get from popular newsletters but you should seriously question any stock that needs to pay money to a newsletter to promote its stock and not its actual product. Paid services tend to be better and often give a free period ranging from a couple weeks to a few months. You can get the free subscription then if you think it is worth while pay for the service or you can even sign up with a new e-mail account to extend the free subscription.

No matter what stocks are suggested you are always free to do your own homework. In fact it is a good idea even if you find a solid penny picker to do at least some research before buying penny stocks.