For the entrepreneur who wants to become a shareholder, there is a simple way to do it without compromising big amounts of money.
When a company decides to increase their value, usually, it offers shares to the public for a specific amount of money. When those shares are valued in less than $5, then the company is considered part of the Penny Stock Market.
This means that if you want to become a shareholder, you can choose whether to go big and buy several shares for, let’s say, 90 dollars each ‒close to the price you would have to pay to become a Walt Disney Co. shareholder‒, or to be careful and invest in small companies.
For beginners, it is easier to start with small challenges that will not cost a significant amount of money, but probably will make you win some.
Become a shareholder for the Penny Stock Market
The reason why Penny Stocks are so infamous among several shareholders, is because they represent a risk: many of them are terrible investment choices. The awful truth is that their lack of liquidity is not good for any investor.
Nevertheless, there are some indicators that can tell you if the company you want to invest in is fundamentally strong and with possibilities of growth. First of all, you have to make some research: find out if they have a strong management team that knows what they are doing. Also, you should check if its business is legal, that is, if they have the complete permits to distribute and sale their product in their jurisdiction.
You must check if that this company is actually growing: growing revenues, expanding client list, improving earnings and a solid financial position are all green lights. If this company is working with new technology of substances, revise that they are properly patented. As a beginner, you may not have a lot of experience to tell accurately if the business you want to invest in is actually a good one. For this reason, it is important to start small: Penny Stocks are better for people with little experience.
Once you have found the perfect company, the next step is to determine how much of it you want to own. If you buy one share, you are officially a shareholder, but that will not take you too far. Most people actually buy several shares and, the more you buy, the more power you have. This is good if you really know what to do with that much influence, and if you know how to take that company to the next level. If you are not sure, you might want to step back. Also, find out how many shares you can afford (both in money and in know-how).
At this point, you must have a short and middle term plan of action. In short, set goals for yourself: what do you want to do with your shares? How much do you expect to win? A good amateur investor doesn’t improvise and always makes thoughtful decisions. In the Penny Stock Market, you cannot expect to become a millionaire overnight, but if you make the right calls, you can make constant money for long periods.
The final step is to place your order. You will probably find the information on how to purchase shares at the company’s website, so just follow the steps.