Beauty Sleuth

Many people who have never played the game before the award of "penny stocks". Heck, even if you've been around investing for decades, penny stocks are still your ticket to triple, quadruple or even quintuple-digit gains. You can not see those if you bet on the Dow.

The problem is penny stocks are a little harder to research than their larger cousins the blue chips. In order to make it a little easier for investors for the first time, here's 10 things to keep in mind when looking for solid penny stock plays:

1. Outside the Box

When it comes to penny stocks, some of the wackiest ideas have translated into major gains for investors who were willing to think outside the box ...

Back in the day, who would have thought that computers were the "wave of the future"? Early investors in companies like Microsoft and Yahoo, who is who! They made a bundle out of the box and Paris on business models and technologies that have been out of the ordinary.

There are new technologies and business models out there in the world "penny stock" of today. Are you ready to think outside the box on your investment Penny next?

2. Know what you own

In the world of Wall Street, if you invest in penny stocks or blue chips, one of the biggest rules is to "know what you have. What does this mean?

You must know the company you invest in the inside and out. Know your business. Know how it makes money. Knowledge management.

But as important as this rule is for any investor, it is doubly important for investors in penny stocks! Because of penny stocks, stock prices can change quickly if you do not keep a handle on them.

So what you have and your investment will not end up owning you.

3. Do not get in over your head

When you see a hot penny stock that is ready to take off, it can be difficult, if not cash in your 401 (k) to buy as many shares as you can ... make over your head with penny stocks is an almost sure you burn.

While penny stocks can make you some serious money, they are volatile - and that means you should not put more than 10% of your portfolio on line.

What smart investor to Penny? Set up an account for stocks that Penny and load it with money you're willing to lose.

4. Do not be afraid to ask ...

One of the beauties of penny stocks is that they are smaller companies that are there for small investors.

As an individual investor, a large multinational company might not give you the time of day. It is generally not the case with penny stocks. In fact, it is not unheard of for individual investors to pick up the phone and chat with the CEO of a company or chief financial officer on site.

If you have a topical perspective on penny stock, e-mailing or calling for investment or business offices of the firm business relations could be one of the best ways say whether this stock for you.

5. Skeptical

Remember when we said outside the box? Well, do it, but remember to be skeptical ...

Just because a company has an interesting new idea does not necessarily mean that it is a good prospect penny stock for your portfolio. The key is ... Do you think he can cash his idea?

If this answer is not immediately clear, it is time to dig a little deeper into the prospects of this company. Thinking outside the box is a great way to bring innovative companies on your radar, but being a skeptic is the only way to ensure that this translates into gains for your portfolio.

6. Think, then buy

When you're ready to buy shares of a penny stock, make sure you take a second to think about what you do. All too many.