With the economy taking a nosedive, and the stock market crashing often, it's no wonder we are starting to see penny stocks on a rise. Instead of risking hundreds or even thousands of dollars at a time, the investor can trade for as little as under 1.00 to under 5.00 per share which would make possibly losing less of a monetary risk. In our present economy, most people simply cannot afford to put large amounts of money on the line, but they still have the desire to trade. Penny stocks, with their much more affordable rate, can help to fill that void, while still providing an opportunity to gain. Although they are affordable, there have been those who have really done well with penny stocks. The gains can be substantial, there have been reports of 500% in returns in some cases! Of course, that is not the majority, however some have seen some pretty good returns on their money.

To do well with the stock market with penny stocks or otherwise, the wise investor would have done his/her homework. They would have studied the market often, weighed their risks according to the way that particular stock is going, but also realizing that things can change drastically at a moment's notice. Also, particularly with penny stocks, they would have done their research on whatever stock or stocks they wanted to invest in and weeded out the scams from the legitimate markets. Also, they would have prepared for the inevitable loss, sorting out how much money they could really afford to lose without suffering a hardship. For those considering penny stocks, it is a good idea to follow this formula when investing your own money.

Penny stocks have been around for awhile but it does seem like we are now hearing more about them. Perhaps it is at least in part because of the condition of our present economy and people are trying to find ways to invest but spend less doing so. In that case, please beware of predators who will try to take advantage of that fact by advertising some bogus penny stock to get your money. Do your homework.

Although penny stocks don't come with less risk than traditional stock, some say quite the contrary, the fact is that the initial cost is much less to get started. That fact alone may be the reason that we may continue to see penny stocks on a rise.