Buying Penny Stocks Without All The Work

Buying penny stocks, while it can be a lucrative form of investing, carries with it a considerable amount of risk. The risks of penny stock investing can be dramatically reduced by doing your homework on the stocks you are considering buying, but that homework is tedious and time-consuming.

There is a new computer "bot" that has been created that analyzes penny stocks thorough in-depth mathematical analysis and by doing so dramatically decreases the risks and increases the profits from buying penny stocks, while greatly simplifying the work of choosing what stocks to buy and when. Of course, such a system does not come cheaply, but there is an opportunity for even the smallest of investors to reap the benefits of it.

Penny stocks have considerable advantages to small investors as compared to other stock investments. The low stock price allows those with small amounts of money to invest to buy shares of multiple stocks and diversify their portfolios much more than they could with higher value stocks. Because even small dollar and cent changes in price can translate to large percentage changes in the price of penny stocks, good profits can be had with relatively low amounts of money invested.

To show the power of penny stock price changes, let's do a comparison. If you wanted to invest $1000 and found a stock you decided to buy at $100 per share, if it increases by $1 per share, you'll have made $10. On the other hand, if you invested $1000 in a penny stock that initially sold at $1 per share and it increases by $1 per share, you'll make $1000!

Because of the percentage of value change that a small dollar value change makes in penny stocks, you can lose money very quickly too. In addition to the inherent risks from normal losses in value, penny stock investing has more than its fair share of scams and fraudulent practices. Companies that issue penny stocks don't have to file financial statements with the SEC (although some do so voluntarily), so it can be very difficult to find the necessary reliable information on a company to do a thorough analysis of the stock.

Various unscrupulous tactics may be used to lure unsuspecting investors into buying penny stocks as a ploy to drive up the stock price and then insiders may quickly sell of their stock at a high price. The sell-off drops the stock value sharply and the investors take a big loss. In investing, it is typical that investments with the highest potential returns will also have the highest risk, but in penny stock investing, the high rate of fraud increases the risk well beyond just what is produced by the natural tendencies of the market.

Up until recently, it would take a huge amount of time and work to thoroughly evaluate penny stocks in order to keep away from the scams and to get a decent return on investment. Several hours of research might be needed to evaluate just a single stock. While this work would usually pay off in the long run, it was often simply too time-consuming for part time investors.

A couple of computer geeks who also had an in-depth understanding of penny stock investing have recently developed "Marl", which is a computerized bot that can evaluate hundreds of penny stocks in less time than it would take a human to evaluate just one. Unlike human stock-pickers, Marl is 100% cold and calculating - there's no emotion to cloud his judgement. Although even Marl doesn't have a perfect track record, he's a lot better than any human, and Marl can dramatically decrease the risks involved with penny stocks.

Marl has been so effective that he has allowed for huge gains by advanced investors. Because of this, Marl is considered a bargain at the $28,000 licensing fee, but bargain or not, this is well beyond the means of small investors. There is an option to use Marl that is available to investors with even the smallest of budgets though. The guys that developed Marl put out an e-newsletter that gives Marl's top penny stock pick for each week. For new investors, this might be even better than buying the full Marl program, as it narrows down the investment options to just one stock every week, instead of figuring out what to buy out of hundreds of options. With this, even the most novice of penny stock traders can do well with penny stocks.

Marl's inventors have stated that they will be limiting the number of newletter subscribers that they allow, and the subscription option may not be available much longer. For the sake of small investors, hopefully they will reconsider and keep the subscriptions list open. For now though, small investors have a big opportunity for assistance in profitably buying penny stocks.

About the Author

George Best is a small investor from San Antonio, Texas. For more about Marl and penny stock investing, visit buying penny stocks. Click here to get your own unique version of this article.

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