Investment is a multifaceted world that can be as exciting as it is profitable. And since so many companies exist, ready to be traded, finding the best ones and getting what you think is a good purchase can be fairly tricky. One area of investing that some investors avoid while others embrace is in Over the Counter stocks, usually called pink sheets. These stocks carry with them some advantages and some risks, and knowing a bit more about them can help you decide whether or not they’re the right call for your investment dollars. Some love them, some hate them, but they’re nonetheless worth knowing about.
Basically, pink sheets are shares in companies just like traditional, better known stocks. However, unlike those traded on a stock exchange these shares are in companies that either don’t meet the requirements to appear in listings like the New York Stock Exchange or NASDAQ, or haven’t filed with the SEC. Many pink sheets companies are actually small businesses that are trying to move forward through selling shares, listing on Over the Counter lists to help raise capital. The name itself come from the fact that the original shares were once printed on pink slips of paper, but today they simple end with the notation of .PK.
Basically, the benefits of investing in pink sheets are the facts that they are usually a good bit cheaper than other stocks will be and that they could have major rewards. Investing in a small company early on could lead to serious profit if the company finds real success – a one dollar share could explode into a thirty dollar one. Of course, pink sheets are also far riskier than traditional stocks since there are no real reporting requirements. Also, the fact is that many businesses simply fail, and if you’ve invested in one of these you could be out a good deal of money.
While most investors agree that pink sheets are among the riskiest investments on the market, they can also be highly rewarding. If you’re thinking of visiting the Over the Counter boards then you should take the time to ensure that any company you invest in is thoroughly researched. You’re pouring your hard earned dollars into this company, after all, so be sure you know just what you’re getting yourself into. With a little bit of research and some careful choices, pink sheets could provide you with some very rich rewards.