Penny stocks are hot lately, and investors are talking about them due to their low share price and potential to make for big, quick gains. The downside, unfortunately, is that if you choose a bad stock, you stand the risk of making big, quick losses too.

This really is why it's always so important for investors to do their research before investing in a stock, they don't make reference to the world of penny stocks as the Wild West for nothing! Penny stocks are renowned on earth of investment for their volatility and the potential for fluctuating values - something as seemingly insignificant as a rumor on digital media can cause a penny stock's value to swing. That being said, for anyone who is on the correct side of that swing, you can make a lot of money out of a small investment, as well as in a short amount of time for you to boot. So do your investigation!

Per share, penny stocks are generally under a dollar. It means that anybody can buy the best quantity of them and stand the chance of getting a considerable sum of money. This does, on the flip side, also provide the stocks a tendency to be unstable. Unfortunately, this impressionable nature invites opportunists who manipulate the price of stocks so that they profit at the cost of countless other investors. This is known as the "Pump and Dump".

These fraudsters will begin out by buying a good quantity of very low-value stock, the kind of stock that nobody wants and is, consequently, literally worth pennies. They then move onto the very first included in the scam: the "Pump". This involves reaching out to as many individuals as possible inviting them into investing in "a stock that is about to go big," convincing their victims that it is a "sure-thing". The better people the scam-artist recruits, the more the value starts to increase as well as the easier it becomes to convince the uninformed that the stock is increasing, as it really is at that point - but not for long... After they recruited a large quantity of investors, driving up the value of said stock, they then quickly sell their once worthless stock for a big profit and vanish. This really is referred to as the "Dump" because as soon since they sell their many shares, the value of all of the victims' stock takes a large dump as a result.

I do not mean to scare you off, people do make a whole lot of cash on penny stocks, but people do their research before they invest. They're very likely to know everything about the company, or portfolio of companies, that they're investing in. So make a hobby out of it, invest in a sector that you're enthusiastic about! In which case you just need to search out a good source of information to keep up to date with stocks within your sector, like my personal favorite by way of example. They focus just on news and alerts pertaining to the exciting world of the budding $1.5 Billion marijuana cannabis industry (click here to read): Marijuana Stocks. Check it out, maybe you are the next marijuana penny stock millionaire!