Are you looking to dabble in the stock market but don’t have a lot of money, or aren’t willing to take a huge risk? Penny stocks are an excellent option for those who are just getting started.

Penny Stocks What are penny stocks? Penny stocks are those stocks which sell for under one dollar per share. They are also sometimes referred to as cent stocks. While penny stocks can be a great way to balance a portfolio, or even start one in the first place there are a few things you should be aware of before starting.

Pros Penny Stocks are cheap. That is one of the most impressive things about them. You can buy literately hundreds of stocks for next to nothing. If your stocks go up, you can make quite a bit of money. Penny stocks let even someone who isn’t flush with cash get his hand into the stock market. The other nice thing about the low cost of penny stocks is if you do lose money, you probably didn’t lose that much. Penny stocks allow you to practice picks on the stock market.

Cons There are certain things to be aware of when purchasing penny stocks. Because of their low cost, they are easy stocks to manipulate and inflated artificially. Because of the low liquidity of penny stocks, most of them are very thinly traded which can sometimes be frustrating when you are trying to sell your shares. Some penny stocks also have false investors and advertisements causing some serious financial scams so it is important that you buy penny stocks from reputable businesses or brokers.

If you are looking to get involved in the stock market, or you want to invest but don’t have a ton of cash, penny stocks are a good way to get started and see what you can do in the stock market.