As a financial blogger, I am often asked about my opinions on penny stock. I always start by saying that investing in penny stocks is very risky and one should do a lot of research before starting to invest in this niche. If you are unprepared and do not due your due diligence you can lose a lot of money because these types of investments are highly volatile and unpredictable. With that said, I do think there is money to be made if you learn to invest wisely.

The first thing you should understand is that these types of investments are usually not available on the regular exchanges like the New York Stock Exchange or NASDAQ. The reason is that the stocks due not usually follow the rules that are outlined. You can find these stocks on the Pink Sheets. They are always traded over the counter.

Be careful with what you read on the Internet, there is a lot of misinformation and outright lies. I have found that if you research and select a penny stock newsletter this can be a very helpful tool.

Another place to find penny stocks is directly through a broker who specializes in this area. Again, you will want to do your research and make sure that the broker is credible and honest.

As you can see this type of investment is one that takes a lot of knowledge and should not be rushed into before being equipped with the proper knowledge. If you spend the time upfront doing your research you can help minimize the risk and maximize your profits.