Micro-Cap Stocks, Penny Stocks and Small-Cap Stocks can often be a tempting addition to your share portfolio, but if you’re serious about investing your money wisely, there are quite a few points to consider before you can be confident that you’ve found a winner. If you don’t know too much about the way the markets work, then you’ll be hard pressed to find a decent investment, so it’s worth noting a few things.

Micro-Cap Stocks, Penny Stocks and Small-Cap Stocks are traded over the OTCBB and Pink Sheets, and these exchanges have a few differences from the larger ones like the NASDAQ or the NYSE. Bid and ask prices can fluctuate rapidly, and because buying and selling these stocks relies on a manual process, the price you thought you were going to pay can end up higher, resulting in a loss before you start.

If you’ve been checking your emails, or have received unsolicited calls or texts on your phone regarding Micro-Cap Stocks, be wary unless you know exactly who they’re coming from. Unlike the big exchanges, there are very few or no requirements for listing over the OTCBB or Pink Sheets, meaning that crucial information regarding the health of the company in question can be hard to come by. You’ll have to do some deep searching to find out what state the company is in.

Good information is anything that gives you an insight into the strength of the company, such as listed assets, debt levels, shareholder numbers, management team capability, and share history. Sometimes this information is available relatively easily, but sometimes it’s not there at all.
Micro-Cap Stocks can be subject to manipulation, and spam emails and cold calling are some of the ways that this can be perpetrated. Get-rich-quick schemes abound on the internet, but if you fall into the trap of believing what you read or hear, you’ll almost certainly blow your money. Remember that due diligence and research you’ve done yourself are the only sure methods of checking out these stocks.

Micro-Cap Stocks can be winners, but be sure to check them out thoroughly before buying, and your share portfolio will stand a much better chance of staying healthy and growing into something you can be proud of.