Penny stocks can be a very wild ride. They are extremely volatile and many of the companies show little liquidity. Meaning you have to be very careful which companies you purchase and when or you could be left holding onto those shares for a while. It is a dangerous market and beginners need to be aware of this fact. Without and solid understanding of trading methods a beginner could find themselves penniless in a matter of days.
There are many venues out there that can help the novice investor learn how to trade. From books to online trading course there is a flood of tools to help people learn how to trade. In tough times where jobs are limited and people need a way to make money the stock market quickly becomes a viable option for many people. Trading stocks has gone from an exclusive option for the rich to a wide spread trend that nearly everyone has the option of benefiting from. Even if you are not one of the people that are trying to hit the jackpot through trading penny stocks there are still plenty of option. You can invest in hedge funds, trade options mutual funds, large cap stock, and the list goes on. Another great thing is the fact that with an online broker such as Etrade you can have much more freedom over your portfolio, in the past you would have to go through another person aka (broker) for anything and then they would have to put the order through for you and this can take time and be a hassle. Now you have the opportunity to make any changes you want from the comfort of your own computer.
With the proper training this versatility can allow you to see much greater returns from your investment whether it be long term stock you are going to use a retirement or for penny stocks that you trade daily as a supplemental income. Let's talk a little about penny stocks as mentioned earlier they can be very dangerous for an investor with limited experience, the problem is penny stocks seem to be pushed towards exactly these types of investors. It is important to realize this so that you do not become one of the many people that have been taken advantage of, penny stocks have become a huge market for advertisers and they don't care who is investing. Small companies are popping up all over the internet that try to get people to invest in certain stocks, the majority of the time these companies are only promoting these stocks because they were paid to get people to invest in these companies.
There are many reasons a company on the stock market would pay someone to promote their stock one reason being the president or CEO of the company has a huge lump of shares that are worth nearly nothing at the current market price. This causes them to pay a promotions company to advertise their stock as the best and hottest stock in the market which in turn causes people to invest driving the price up and allowing the CEO or whomever to sell their shares at an inflated price. A lot of the time you the small investor is left holding the bag without anything to show for it expect a drastic loss of investment capital. Don't think that you will always lose when investing in a promoted stock there are many opportunities that can allow you to make some outstanding profits from these promoted companies. One of the main reasons people don't end up profiting from these situations is the fact they hold onto the stock to long or buy in too late. It is extremely important to not be greedy when it comes to these stocks because they can drop in a matter of seconds. The trick is to get in and out as soon as possible.
Most of these promoted stocks go up at least 20% so a good idea is to make it your goal to sell as soon as your gains hit 20% or 20% from the initial price. Sometimes this will seem like a bad idea when you see a stock run 100% or more after you sell but in the end you will come out ahead and the person that holds to long will end up with nothing. Of course over time you will become a more knowledgeable investor which will allow you to better judge the movement of the stock so that you can predict if they will continue up the charts for a while.
Now if you do decide to invest in penny stocks that are covered by newsletters it is important to find reliable source. There are newsletters coming out of the wood work promoting penny stocks and it is important to find one that really can make a stock move and knows which stock have potential. One way to find out if they are a real company and reliable is to look at their websites is it professional does it give you tips on trading or options to look at quotes if so you can put that on your list as a company to try out. An example of a website like this is the company http://www.stockmarketquote.us/ . They offer many different tools to help you along with articles on different stocks not just ones they are promoting; they actually take the time and have the skill to review other stocks that may have great potential. Now there are the sites you want to be wary of, it is probably a good idea to stay away from any site that wants to charge you money.
If they need money from subscribers it's a good they are not making enough money from the promotion of the stock meaning companies don't feel they move the stock price up enough to warrant more money. Also if their site looks cheap and only has a few paragraphs telling you how you will be rich and then only has a small sigh up box it's probably not reliable. In the end it will be a little trial and error but those tips should help narrow down the sites to one that are pretty reliable.
0 comments:
Post a Comment