What is the True Potential of Legitimate Penny Stocks to Watch?

The only time mainstream media reports on penny stocks is when an investor invests a dollar and makes millions. These high-profile stories do happen, but how often? Is it realistic to expect that with a reputable company, or is this Midas touch simply unachievable in any realistic format.

That is the big allure of penny stocks, and it continues to draw people in. Appropriately, investors need to keep their expectations in check. Though breaking millions with a single penny stock is theoretically possible, is it realistically possible?

There are two main sources to find penny stocks to watch. The NYSE does not count, though cheap stocks can be found there. Penny stocks are traditionally one cent to $5, and stocks in that range are rarely available in the core exchange system.

These two sources are the Pink Sheets and the Over-the-Counter Bulletin Board. Pink Sheets are virtually unregulated. It is rare for any potential to derive from this source because of the lack of regulation. Pink Sheets are hardly viable, but that does not mean they are worthless. Pink Sheets are great for establishing connections with listing publishers as well as small upstarts. Be wary of scam practices that permeate throughout the entire Pink Sheet industry.

The OTCBB is substantially more reputable because they review companies for registration records and other standards. It is possible to make a 1,000% gain on a smartly selected Bulletin Board pick. Investors will have to practice their due diligence by looking at how the company is behind the scenes. Investors review the accuracy of their reports, their business plan, growth expectations, and other factors. How a company sets itself up can be a fantastic indication of their work ethic and approach to business. Consider hiring an attorney and, of course, a stockbroker with a great track record.

By staying away from unregulated Pink Sheets and sticking to companies that are well-organized, investors can find that big victory. A great penny stock is not a unicorn, but it is an endangered animal, hiding away and waiting for an inquisitive person to offer the right kind of incentive.