Buying Penny Stocks The Lazy Investor's Way

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.

A new computerized system has finally been devised that uses cold, hard, mathematical analysis to greatly reduce the risks and increase the profitability of buying penny stocks, while eliminating most of the work involved. As you might have guessed, this technology comes at a rather steep price, but some creative minds have come up with a way to make it accessible to the small investor while making the process of buying penny stocks simple and easy for even the newest of penny stock traders.

Penny stock investing has big advantages when it comes to large, rapid returns on investment, and the fact that penny stocks are priced low enough for even very small investors to buy stocks and have the opportunity for a diversified portfolio. Because penny stocks have such low values, just a few cents change in the price of the stock can equate to a huge change percentage-wise, and potentially a huge profit to the investor, depending on the amount of the total investment, particularly in comparison to the profits possible with larger value stocks.

For example, if you had $1000.00 to invest, and put it into some stock on the S&P 500 list at a purchase price of $100.00 per share, and it went up by $1.00 per share, your $1000 investment would yield $10.00. But, if you purchased $1000.00 worth of a penny stock at a purchase price of $1.00 and it went up by $1.00 per share to $2.00, your $1000 just became $2000 - a yield of $1000!

Unfortunately, just as penny stock investing can provide very high profits very quickly, buying penny stocks can result in big losses quickly too. Besides the normal risks that occur just from normal market forces, penny stock investing is especially risky due to the relatively high rate of fraudulent practices by sellers of the stock. Corporations that issue penny stock are not required to submit financial statements to the SEC, so it can be hard to find good information that you can rely on when trying to evaluate 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.

To overcome the risks, buying penny stocks has traditionally required a large investment of time to research stocks to avoid the scams and predict a relatively good rate of return. A careful penny stock investor could spend quite a bit of time evaluating a single stock. This effort would hopefully pay off in the long-run, but the time required in doing this often made penny stock investing out of the question 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 allowed some big investors to make many millions of dollars, and as such, Marl doesn't come cheaply. At $28,000 to purchase Marl, he's out of the question for most investors, but there is a way for investors with even the smallest of budgets to use Marl. Marl's human inventors put out a very affordable newsletter with Marl's top penny stock pick each week. In the case of those investors new to penny stocks, this could be preferable initially to owning Marl, as it limits their investment choices to just one stock per week as opposed to having to select from many options. This makes for easy stock investing for even the newest of "newbies" to penny stock investing.

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.

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George Best is a small investor from San Antonio, Texas. For more about Marl and penny stock investing, visit buying penny stocks.

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