Any advice on penny stock investing?

just looking to make a number of good small investments.

While I agree with what many have said about investing in penny stocks - staying away - if you are going to invest in them no matter here is some advice.

1. Only use risk capital. If this is money you need to pay bills or buy groceries, you shouldn't be investing in the stock market period, let alone penny stocks.

2. Whenever looking at a penny stock be more critical and suspicious than you would be if it were a well established enterprise.

- This means ensuring that the company actually has real
underlying operations. You may be surprised that some penny stock companies have no functioning operations.

-Look at the financials to ensure that they have enough capital to continue their operations on an ongoing basis looking forward. Many companies in this space lack capital to fund operations, which will either lead to bankruptcy or a need to raise capital, usually having a dilutive impact on your position.

3. Do more research on the penny stock market itself such as its illiquid nature and its much more lax listing requirements - such as fewer requirements on disclosure.

Here are some good articles:
http://www.investopedia.com/articles/03/...
http://en.wikipedia.org/wiki/Penny_stock

If you're looking to make good small investments, don't invest in penny stocks.

stay away from it, look at companies that have been around a while with a proven earnings history

It is high risk.

My advice: DON'T!!
Almost everyone I know who has bought penny stocks has lost money. There is a lot of pump-and-dump activity in penny stocks. I get 'strong buy' email recommendations every day from pump-and-dumpers.
I recommend Exchange Traded Funds allocated between domestic, foreign and emerging market funds.
http://wwwtaxman.blogspot.com

Take everything you've read about getting involved with penny stocks and bury it.

Bury it deep.

With a shovel.

Then throw away the shovel.

Then, if you still want to get involved in the market, start putting money into a NO-LOAD index mutual fund, such as Vanguard's Total Stock Market Index Fund. You'll at least have a likelihood of not losing it all, as you will in penny stocks, plus you'll actually make a pretty decent return most years. Almost nobody gets rich quickly, but a whole lot of people get wiped out quickly.

Investing in penny stock have high risk. Big Institution don't like to invest in penny stock. That's mean stock hard to go up and easy to go down.

If you are going to invest in penny stocks look at Canadian resource stocks that trade on the US OTC. Canadian resource stocks listed on the venture exchange often land below a dollar. But the main thing is a lot of them have solid business models and experienced management. They are just starting out. In the US companies have to get to a certain market cap and share price to be on the standard exchanges. This is not true in Canadian. This even causes a good deal of US companies to go there. An example is US Gold Corp (UXG) which was started by one of the founders of Gold Corp (GG) . It started out on the Canadian exchange as UXG, and on the US pinksheets as USGL. Just recently it was ok'd to trade on the Amex. But in the meantime canadian traders, and wise US investors kept it trading. The big challenge is getting solid info, but it is easier for Canadian stocks than run of the mill pink sheet and OTC companies, most of which will disappear. However, to really play this market, I suggest using a brokerage that has good access to the Canadian exchanges rather than using the otc symbols.

I agree with all of the above. The reason penny stocks are so "cheap" is that they are usually small companies with questionable outcomes. Its the wrong place for newbie investors. I've even dabbled in them personally a few times, but only with money I can afford to lose, well less than 1% of my total investment money. EVERY one has so far failed to gain, much less break even, and moves up or down 30% or more in one day! The problem is it might move up 35% in one day, but down every day after that for weeks on end.

As far as making small investments, you can buy 1 share of stock (in some cases less). I recommend you check out www.sharebuilder.com .

You can select investments in larger, more profitable companies, and then buy a few shares at a time of their stock. Sharebuilder offers $4 trades but you buy once per week or so. Its a good way to set up a plan where you constantly buy small amounts of stock with almost no startup money. You simply deduct an amount of your choice from your bank account each week and tell them what you want to buy with it.