Everyone wants to get their foot in the door, and ideally on the ground level when it comes to making investments that will yield stable and significant returns. It is reasons like this that make trading penny stocks so attractive to so many people these days.
Penny Stocks, also referred to as “micro-cap stocks”, are defined by the SEC as any stock that trades below $5. Another indication of a penny stock is where it is traded. You will only find penny stocks trading on the over-the-counter bulletin board (OTCBB). Since the SEC doesn’t regulate penny stocks as closely, and also due to the prices of stocks like these, there is far more risk associated with penny stocks than those that trade on the New York Stock Exchange.
The reasons do not end there, however. Since companies that trade on the OTCBB are not required to register with the Securities and Exchange Commission, there is far less information available, and the information that is around is hard to come by and often from unreliable and unqualified sources. Thus, these stocks become prime targets for those looking to invent misinformation for their own profit. The absence of liquidity is another risky element attached to penny stocks. Low liquidity can prevent you from selling a stock or encourage a less than savory character to promote, inflate, and manipulate the stock.
The bottom line regarding penny stocks is there are plenty of them out there, but for the amount of time and energy involved and a higher risk of being exploited or set up to take a loss, stocks on the NYSE offer more piece of mind, and depending on your definition of safe, stocks that will cost you more than a penny-or $5- are not as dangerous.
Those with first-hand knowledge of the threats tied to the financial markets include accountants, and while it may appear to be a less-than exciting career choice, the potential for not just an above average but lucrative salary exists for accountants who work within the securities and commodity exchange sectors. The benefits of a background in accounting are many, from gaining a fundamental understanding of how numbers are arrived at once they have been organized. In addition, experience gained from a degree in Accounting can have several applications, from a gateway towards becoming a CPA to positions with more emphasis on the finance end of the market and business.
In essence, a degree in Accounting will start you down the road to becoming an accountant, and once you have become one, the experience you have gained will improve your knowledge of finances as well as make you an attractive or potential employee for a position within the financial sector.
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