Given their low trading price and growth potential new and inexperienced investors often start their journey with penny stocks. As always, it is important to be aware of the risks and to conduct research before making an investment. See how analysts are rating the stocks you are interested in and make sure you check the historical performance of any analysts whose recommendations you are thinking of following. Consider if you prefer to invest in stocks that are listed on a stock exchange, as they may offer additional security to those traded over the counter. As penny stocks are often offered by small companies with limited resources, they can be high risk investments. This can be compounded by a lack of reliable information. Be aware that trading volume can spike following company news and prices can rise if the event is positive, until demand subsides, which can be within a day, or weeks, if at all. This volatility can make penny stocks attractive to short term traders.null