There are many definitions of penny stocks. Most people refer to penny stocks as those stocks that trade below $5. To others, it constitutes the stocks which do not find a mention on major exchanges like NASDAQ or NYSE.
Penny stocks are generally accompanied by high-risks. Many penny stock companies also have gaps in corporate information and/or financial reporting. So, one must be aware of the maximum available facts in order to get better results.
Can You Buy Penny Stocks In An IRA?
IRA refers to the Individual Retirement Account. Many of today’s investors want to benefit from short term trading by utilizing any investment account. So it’s no wonder why someone would ask, “Can you buy penny stocks in an IRA?” Similarly, people will also wonder, “Can I buy penny stocks with my 401(k)?“
A few IRAs can be used to buy penny stocks. The best way to invest your IRA carefully in a penny stock is to hire a broker. A broker will guide you to invest it on OTCBB (over-the-counter bulletin board). You can also invest IRAs into a list of stocks by taking a more self-directed method. Most of the best online brokers will offer options to open and manage your own retirement account; IRAs included.
You have two ways in which you can invest an IRA in penny stocks. These are-
- Hire a broker and invest under his guidance. It has more chances of profitable results.
- Invest on your own by collecting the required information and other needful.
There are many apps and webpages involved in this field like TD Ameritrade, E-Trade, Scottrade to name a few. Penny stock investors are generally concerned about the fees and charges. So, if you are highly concerned about the transaction fees and charges, choose your broker accordingly.