Without a doubt, penny stock investing can definitely give you the chance to increase your profits a hundredfold. However, you could also lose your trading capital pretty fast if you aren?t careful. Here are the top tips that can help you reduce the chances of that happening.
First of all, you have to keep in mind that penny stocks have that name for a reason. Although everybody dreams about investing in something huge, like the next Microsoft, the truth is that the chances of you finding anything like that are very, very slim. In most cases, penny stocks exist for new companies that simply didn?t have compelling business plans that could justify IPOs or companies that bought shell companies due to the mere fact that they were much cheaper compared to IPOs. Now, this doesn?t necessarily mean that it would be a bad idea to get into penny stock investing. It merely means that you have to be realistic when it comes to the type of companies that you choose to invest in.
Second of all, you have to figure out whether the company you want to invest in knows how to turn a profit. Although most start-up companies don?t really lose any money, you have to find out why they lose money when they do. Can they deal with their losses? Will they need to get into a joint partnership that isn?t in their favor? Will they need to get more financing? If so, then your shares might get diluted.
On the other hand, if they know how to turn a profit, their business will definitely grow ? and their shareholder value will grow with it. So, make sure you do enough research on your company beforehand in order to increase the chances of higher returns in the long run and to reduce the risk of losing your capital.
The last thing you have to think about is where you heard about the stock to begin with. A lot of people hear about various penny stocks through mailing lists. Now, although there are a lot of great penny stock newsletters out there, a lot of them are a waste of time, too. Some newsletters might have insiders who fill the newsletters with various shares and start pumping up companies to subscribers who least expect it.
Of course, not all of these penny stock newsletters are bad, but how can you distinguish the good from the bad? Well, one good method would be to subscribe to some of them and track their investments for a while. Were there any legitimate opportunities to earn money? Usually, their overall track record will speak for itself and you will realize quite quickly whether their newsletter is a trustworthy one or not.
It would also be highly advisable to only invest up to 20% of your portfolio in your penny stocks of choice. After all, you want to get into penny stock investing in order to make some money, right? So, make sure you don?t risk a lot of your capital; doing so might only increase your chances of losing it.
Tags Finance
Source: http://www.shasi.org/penny-stock-investing/
breaking dawn mortal kombat 9 msft alexander the great degrassi stumbleupon temperature conversion
No comments:
Post a Comment
Note: Only a member of this blog may post a comment.