Most investors have heard the term "pink sheets" as a reference to stocks. But how many know what they are?

Pink sheets are companies that are traded over-the-counter and that aren't part of any major stock exchange. But that doesn't mean they are any less valuable than traditional stocks, exchange-traded funds (ETFs) or mutual funds.

In fact, expanding your portfolio with pink sheets can be extremely lucrative, but you have to make the right moves to rake in the big profits.

Let me explain…