Penny Stocks

Time to Know How to Invest in Penny Stocks for Beginners?

Nowadays, making money isn’t enough; you must make your money grow. And to grow your money, you need to invest in stocks. But as a new investor, you can only afford penny stocks. And no one has ever given you an analysis of how to invest in Penny Stocks for beginners.

So, you’re confused and don’t know the DOs and DON’Ts of the market. If it helps, even I was a rookie once and got everything figured out independently.

Therefore, you, too, are capable of it. Just like an in-depth investment article helped me be aware of Wall Street’s big, bad wolves, this article will help you too.

[The Best Stocks to Buy Today

Canaan, Valco, Cemex, Lloyd, and Inter & Co. Inc. stocks are the best penny stocks you can buy today. However, you must also remember that buying stocks comes with several risk factors. And to minimize those risks, kindly research thoroughly and then invest.]

Key Takeaways:

  • Always remember that pink sheet stocks will take you down. So, run as far away from it as you can.
  • The OTC market should be your first choice while investing. It will directly connect you to your preferred company and help you buy stocks.
  • Beware of Pump and Dumps. Stocks that show high potential, in the beginning, would likely go down, taking all your savings.
  • Grab the time! Don’t fall for overtrading ventures; knowing to sell your penny stocks is as important as buying them.
  • Research, research, and keep researching about each penny stock before you plan on buying them.
  • Invest the money you want to lose. This must be the ideal attitude while investing in penny stocks.
  • If it’s a low-liquidity stock, you keep away from it.
  • Buy stocks from at least 4 different sectors. And don’t forget to research them before you invest.

What is Penny Stock?

Penny Stocks are those whose value is $5 or less in the trading market. However, according to the Securities and Exchange Commissions, Penny Stocks are issued by the Micro Cap companies whose value is $25 Million or less.

You cannot buy Penny Stocks on the major or main exchange market. That’s because, the honchos of the stock market like the NYSE or NASDAQ requires a minimum bidding amount ($1) for 180 days to remain on the main exchange market. And if they fail to meet that amount, NASDAQ disqualifies them.

Therefore, people interested in penny stocks usually prefer over-the-counter markets and trust OTC Market Groups in such matters.

However, please remember that Penny stocks often belong to those companies who’re on their verge of bankruptcy. So, read the rules, terms, and regulations thoroughly, before you start investing.

An In-Depth Analysis On How to Invest in Penny Stocks for Beginners

Penny stocks are ideal for investors who don’t have enough capital to invest in Tesla or JP Morgan Chase & Co.

That said, to understand the best Penny stocks to buy, you must learn the ones you don’t want to buy.

Therefore, this article will primarily focus on the factors to consider while evaluating the penny stock you want to buy.

1.   Find What’s Right For You

Learn about penny stocks vividly before you plan on investing. Some penny stocks are sold at really low prices. However, once you buy and lock the stock, the price increases rapidly, then again down below your investment amount.

Therefore, if you’re locking your money, please do so to a portion you can afford to lose.

2.   Are You Aware of the Market? 

Market awareness is essential if you plan on buying a penny stock. The Penny stock market is highly volatile and can rise up and down at any moment. Hence, it’s better that you always keep on checking the market and find your most potent fighter.

For more penny stock info, you can also follow YouTube channels like Investors Underground and Sasha Evdakov, AKA Tradersfly.

3.   Some Research On the Company Would Be Nice

Once your market research is done, it’s time for some company research. Always read everything about the company you’re planning on putting your money into. Read how many recessions the company has endured and how it bounced back after each recession.

Some good penny stock performers in the market are Canaan, Inter & Co. Inc., Valco, and Cemex.

4.   Do You Know What Are Prices And The Value? 

A company’s stock says a lot about the company’s current financial position. Therefore, it’s essential to learn about the company’s financial stability and then invest in the stock. If you find that the company is financially unstable, don’t invest, no matter the stock price.

Chances are, they’re pumped-up stocks, and the price will soon go down.

5.   Paper Trading Is Great Start

Paper trading is like taking mock quizzes; they help you learn about your subject better. Start paper trading with demo accounts 2 to 6 months prior to your day trading. It will help you gain immense perspective and help you understand which stock will get you paid.

You can easily call paper trading a part of your in-depth research process.

6.   Understand The Dilution Effect

Dilution comes into effect when a nano-cap company distributes new stocks in the market, decreasing the value of its original stocks. Such actions will lower your stock price, resulting in your loss.

Therefore, learn about the dilution effect and understand the stock-releasing pattern of your intended company.

7.   What Are Your Investment Horizons?

Do you know how to understand if your money is actually growing? It’s impossible to invest unless you have knowledge and ideas about this factor. Know how your funds are expanding and when they are expanding.

Moreover, you must also evaluate your investment focus with personal objectives. Only then you’ll be able to gain out of your investment.

8.   Monitoring Is The Best Way To Move Forward

Once you’ve understood the game of investment, learn to monitor. And although monitoring isn’t a difficult job, it can be tedious. You always have to keep an eye on your investment and understand how your money plays on the field.

And at times, you have to sleep with an eye open to learn about your money and its growth.


So, I have given an analysis of how to invest in penny stocks for beginners. Now, if you’re interested in making your money grow, then read the analysis with thorough care. And then start investing capital.

And kindly remember slow money is good; fast money can take away all your savings. Good luck!


Penny Stock, as the name suggests, is a stock whose value is less than a dollar. However, given how one invests it, penny stocks can give great returns on investment.

The top 10 penny stocks for investing right now are:

  • Vaalco Energy stocks (Energy)
  • Canaan Stocks (Technology)
  • Ardelyx Stocks (Healthcare)
  • Savara Stocks (Healthcare)
  • Angi Inc. Stocks (Communications and Services)
  • ECN Capital Corp Stocks (Banking And Finance)
  • Cemex Stocks (Building Materials)
  • Lloyd Group Stocks (Banking And Finance)
  • Brandywine Realty Stocks (Real Estate)
  • Inter & Co. Inc. Stocks (Investment)

Vaalco Energy’s stocks are the best penny stocks to buy today. But that doesn’t mean, my words are the 11th commandment. Always remember to do your own research. You cannot learn to become a good investor unless you learn to research by yourself.

Stocks, in general, are a volatile asset that can go down at any moment. However, with penny stocks, the risk lies a little more. Hence, it can be said that with adequate personal research and knowledge, penny stocks are safe to invest in.