August 16, 2008
Penny Stock Investing guide 101
By IdeaMan21
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Penny stock trading has its pros and cons. While the benefit is obvious, accruing an incredible profit over a minimum time period, the disadvantage is huge loss due to timely and often unwanted and unexpected fluctuation in the market. Therefore prior to investing in penny stocks there are quite a few things that a trader should bear in mind.
To begin with the trader should at first examine the share structure and distribution of the shares of a particular stock. Doing this will help you in striking from your list of potential stocks any that indicate a highly disproportionate number of shares held in a single offshore account. For instance if you find millions of shares being held for less than a penny in a single offshore account, you can assure yourself that the moment you invest in the stock, heavy selling will result. Also the moment the stock prices begin to rise, buyers will not show any inclination towards purchasing and your shares will be rendered good for nothing. So it is preferable that you opt a stock where distribution points to a large number of holders.
A trader should always verify the status or legitimacy of the company. The best way to do it is to contact the company. Most companies list their main contact numbers. Don’t hesitate in calling up the company. Since it is quite possible that a false line is being arranged for it, you should also contact the local operator and find business listings for the officers of the company. In case there are no listed numbers or local numbers to contact the company, drop the idea of that company completely. This is because there is a great threat of fraudulent companies hungry for your investment money. Also if the CEO attends your phone call or the number is residential, means that company is sham.
When a particular stock is in your mind, before making a move further, take a look at the latest and long-term history of the stock and the company. If the company’s history is composed of reverse splits and reverse mergers, its future is quite precarious. Find a company that has a long and successful history. A company with a long time line can be considered to provide you fruitful returns.
Before investing any amount be aware that you could lose. All investment vehicles have risk, penny stocks risk are greater because there are so fewer shares and fewer traders. Your personality and the amount of money you are willing to lose are always connected. Pick an amount of capital that you can afford to spend and lose. Since these investments are a risky affair, it is better that pertaining to your bankroll; you calculate a certain sum, losing which, will not trouble you much. Only if you can bear a big loss without hassles, go for higher risk or gain investments, otherwise don’t.
Since the penny stock companies often do not have definitive revenue systems, measurable inventory levels, reliable quarterly financials or even a definitive product, the worth of most penny stocks can be skillfully assessed. As the stocks of these companies move on speculation, the investor should use alternative research strategies to know which stock will provide great potential in future and has high degree of accuracy.
Probably the best alternative strategies is too buy a newsletter with a winning record. There are several out there that only specialize in penny stocks. That is the best option since penny stocks are a very complicated and intricate investment vehicle. Currently one of the best newsletters available and having a winning track record is being run on software that two friends put together. They both have used each others strengths to develop this “robot” that has been the best selling newsletter for the past 3 years.
CLICK HERE AND YOU CAN SEE THE NEWSLETTER FOR FREE FOR 60 DAYS
CLICK HERE TO GET A FREE BOOK ON PENNY STOCKS
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Topics: Main, investment, make money online, newsletter, stocks | 3 Comments »
3 Responses to “Penny Stock Investing guide 101”
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August 16th, 2008 at 1:08 pm
Penny Stock Investing guide 101 | DollarCreater.com…
The basics to get you on the road to riches investing in penny stocks/pink sheets. From knowing what to invest in to knowing where to invest….
August 17th, 2008 at 5:47 am
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April 19th, 2010 at 6:11 pm
The cool thing about this whole system is money is Given to You to help offset the investors losses, You will Be assisting a investor in making gains, and Receiving commissions for Doing so! And all You are to Do is create a FREE account, and they instruct You what to Do.
FAQ.