Have some fun with Penny Stocks

I don't have a lot of time today for my blog, but I wanted to share a fun topic: Penny Stocks. If you have some spare time and you're a bit of a gambler, this can be an enjoyable venue for you.

I got started playing with penny stocks a few years ago. Basically, they are stocks priced under $1.00 per share - hence the name "penny" stocks. I own some that cost LESS than $0.01 per share!

Why would you gamble on penny stocks (and that's exactly what you're doing)??

Well, first of all, it's fun to buy these and watch what they do. Second, there's always the chance that you'll pick one that could turn into the next Microsoft.

And there are tons of them out there to choose from. All you need to do to find ideas on stocks is to Google the terms "penny stocks" or "hot penny stocks" and you'll find dozens of sites providing tips. Here's a link to one I just checked out this morning:

http://www.thehotpennystocks.com/

Now, I caution you on a few things:

1) I haven't made a penny with my penny stock portfolio - so I won't share my personal picks with you unless you ask me to do so.

2) This is like Vegas or Atlantic City, unless you can afford to lose the money, don't play the game.

3) This can be addicting! Like I said, it's basically gambling. And, it's kind of cool to say "I own 1 Million shares of this company!"

If you're interested, here's a link to a FREE online book by penny stock guru Peter Leeds titled "Understanding Penny Stocks:

http://www.pennystocks.org/

To get started you WILL need an online trading account. I use E*Trade, but there are a number of others to choose from like ScottTrade. These have low commissions (you have to pay a commission for each buy or sell order that you make - ranging from about $7-$13 depending on the company you choose). Here are the image links below to E*Trade and ScottTrade:

It's simple to set up an online account with these companies. They will require a deposit (I believe E*Trade requires $1,000) to get you started trading. Once you're set up with an account, you just need to type in a stock ticker symbol (e.g. GOOG is the symbol for Google - but it's definitely NOT a penny stock). Then, you need to decide how many shares you wish to buy. You'll also be asked to choose how long your buy offer is good for (e.g. one day only, one week, 60 days, etc.) and you'll be asked if your offer is a "market" offer or a "limit" offer. A "market" buy offer means you'll pay whatever the market price is at the moment you submit your offer. The "limit" offer means that you can set the price you'll pay (it can be under the current market price). I always use the limit offer because I'm in control of what I'll spend. However, if you feel like you just have to have a stock right away, the market offer is the way to go.

Those are the basics. Honestly, I didn't read any books beforehand, I just waded in and learned as I went. I didn't even have the weak advice that I'm providing here to go on.

Anyway, I hope I'm not turning people into gamble-aholics with this blog. Just have fun with it and who knows? You could be the next Warren Buffett!

Until next time. Retirement Wiz (email me at: johnha7@yahoo.com )