Frequently Asked Investment Questions

We’ve done our best to provide responses to the questions we receive most often. If you have a question that is not addressed here, please don’t hesitate to ask.

What are penny stocks?

Penny stocks are low-priced securities with a value of $5 or less, issued by small and emerging companies. Penny stocks are traded over the counter (OTC) through quotation services such as the OTC Bulletin Board or the Pink Sheets.

Why should I buy Penny Stocks?

Penny stocks hold many advantages for investors. Principally, they often have the potential to deliver huge gains in a very short time. This happens because they are under the radar of traditional brokers. As a consequence, they are often undervalued, giving astute investors the opportunity to get in early before big price moves.

Do I require any special skills or experience to get started trading penny stocks?

The short answer is no. But you need to appreciate that the more you educate yourself and prepare before engaging in any kind of investing, the greater your chances of financial success.

What kind of penny stocks will you alert me to?

We alert Rethink Capital’s members to companies listed on the OTCBB and AMEX. We look for an experienced and proven management team, unique products and services with the potential to go big, companies operating in strong growth sectors, existing clients or contracts and much more. Our analysts will recommend companies with both short and long-term potential, depending on the company’s mix of attributes and the overall situation.

In general, we do not release picks on Pink Sheet companies due to the lack of information provided.

Where can I buy penny stocks?

Most online brokers allow you to purchase penny stocks. Brokers to consider include Speedtrader, TD Amertrade, Scottrade and E-Trade.

How much money does it take to get started investing?

You will need to talk to your broker to determine minimum accounts requirements at the financial institution of your preference. Some brokers require no initial deposit at all, others require $500 to $1000, and others want $2000 to $5000 or more. As a general rule, you should invest only a small portion of your overall portfolio in the micro cap sector, since this form of investing is considered speculative.

Can I make a fortune before lunch and retire from my day job?

You may have heard stories of lucky individuals hitting the proverbial jackpot in the penny stock market, but you won’t find that kind of hype here. We encourage you to do your homework and treat investing in this sector as a serious business – not as a get-rich-quick scheme.

When do I sell?

Nobody knows how high a stock price will climb, nor how quickly it might fall. Even though many penny stocks double and triple in price, it’s wise to take at least some profit whenever you see fit.

How do I find quality penny stocks to invest in?

We invite you to join our FREE email list to receive alerts on the hottest OTCBB and AMEX companies. But make sure you do your own due diligence on companies we tell you about. Understand the company’s business, management, products or services. Read everything, including press releases, reports and financial statements. And of course, consult your registered stockbroker and financial advisor.

Are you compensated for issuing alerts?

Although we turn down the majority of companies that approach us, we do at times accept compensation from companies that we have thoroughly researched and believe will provide substantial opportunities for both short and long-term gains. If we happen to accept compensation for an alert, we are completely transparent. As required by the SEC (Securities and Exchange Commission), we will disclose to our members via email and on our website the identity of the party or parties who paid us, the amount we were paid and the type of payment.

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