All investment opportunities need to be studied carefully so that you won’t be pulled into a scam. Studying an investment will also allow you to know if it’s for you. Some investments are meant for specific profile types. You should be able to weigh the plus and minuses of every investment opportunity. So, always beware of hot investment tips like a stock pick for the day. It’s possible that the stock is being jockeyed and you can get burned in the stock market. There are plenty of people getting burned in the stock market because of penny stock offers.

There are many penny stock offers online. You just check you inbox and you will find these messages like these: Penny stocks! Get Rich now; Top picks for Penny Stocks. These messages are well marketed designed to get your emotions going so that you’ll want to jump in and join. If you’re not familiar with stock trading, you’re going to be screwed with such offers. Penny stocks are risky investments. You should invest in blue chip stocks instead and growth stocks. Penny stocks messages are complete with testimonials.

Well then, how can you tell if it’s a scam? Easier said than done, really. But there are some common signs you can look out for:

Improbably high returns or “100% guaranteed” success rates are definitely terms to avoid. How else can you be convinced, unless they use such aggressive, confident-sounding words? If an email or website claims that a particular penny stock is the hottest deal around, beware. If you read a line or argument that absolutely, positively states their method is a tested, proven technique or strategy, beware. Because, in the end, that’s all it is a strategy. Seemingly foolproof guarantees like these can get you into hot water fast.

Scams are usually “for a limited time,” and are very cheaply priced. Fraudsters lure you in by declaring that the stock’s prices have gone down temporarily, to a level you can now afford this is your lucky day. Then they’ll tell you to invest as soon as possible, in fact now. Listen to their message closely, and hear between the lines. Hot penny stock picks might indeed be great but only if you trust the person or persons offering them.

These offers also try to persuade you with their glittering success stories. Again, this is one strategy that never gets old in tricking people into the scam. You should research these claims carefully. In fact, ask the company to provide proof of their claims.

So how can you tell which penny stock offers are scams? It’s not easy; but it’s not that hard either. Don’t be gullible; don’t be easily fooled. Verify the stock’s authenticity, and the credibility of the broker or promoter touting it. Check their company records, which ought to be available online; if they’re not forthcoming with their information, then there’s something wrong. Make sure the company offering the shares has legitimate state and federal licenses to do business. Always double-check to see if such companies are registered with the SEC.

No one should be able to pressure you into investing you, and you alone, shall make the decision. Before you accept an offer, make doubly sure it’s not something too good to be true. Because chances are, it is. Success doesn’t often happen overnight. In fact, with stock trading, it’s as uncertain as choosing heads or tails. Take your pick, but beware of the outcome.

The journalist who wrote this column has discovered a corporate finance expert by the name of Josh Yudell. I believe Josh Yudell to be widely considered an expert in the fields of investor relations, SEC compliance, corporate finance and capital structure.