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Resources is a post from: WhereToBuyPennyStocks.net

A lot of times when people hear the phrase buying cheap penny stocks, they start thinking cheap stocks that can be bought at really low prices and then sold quickly for a profit. What ends up happening often is that they buy a penny stock and see its price fall quickly. In a panic, they sell only to see the price rise up beyond the point where they bought the stock at. This article is written to minimize the chances of exactly that scenario.

Like all good investments, the profits are made *before* you make the investment. What this means is that you buy an asset at a discount and sell it when its reached its fair value or once its overvalued. It sounds fancy but its really a simple process.

First, don’t be lazy about research. This is usually the first stumbling block when it comes to penny stock investing. Most novice investors read get some tips either at the water cooler or in investing forums. Then they go ahead and buy the stock immediately to avoid any pain of missing out on gains. The gains dont come of course. I am not suggesting you don’t keep an eye out for high-growth stories. Once you hear about a company that is making great strides, you have to dig deeper. What is the business model, competitive advantage, price range, book value and P/E ratio. There should be a basic checklist for all companies that you research. If one or more criteria in that checklist are not met, dont invest.

Second, plan your trades in advance. Investing or any decisions to do with money are usually emotional. If you want to get better at it, you have to minimize the effect of emotions in this process. During your research process, you should be able to identify the ideal price range that you are willing to buy a penny stock. At the same time, you should figure out what your ideal selling price range is i.e. the percentage profit you are willing to settle for. In effect, you are planning your entry and exit points before you make the trade. This will save you a lot of grief in the long run.

Third, use the best penny stock broker without paying more than you should. Long gone are the days where there were a handful of brokers and they would charge an arm and a leg for their services. These days online brokers are fighting each other to get your business. Before you jump in, compare online stock brokers to see which one will work best for your needs. There is no need to settle for one that you are unhappy with.

What are you waiting for? Lets get started today …

Buying Penny Stocks Profitably – How To Do It Right is a post from: WhereToBuyPennyStocks.net

Before jumping into the deep end of penny stock investing, we should give a short summary of what penny stocks are and what sort of investors should be looking at them. If you were to look up the definition of penny stocks online, you would find a lot of different variations. Some would refer to the stock price alone, the market cap or where the company shares are trade. For a slightly comprehensive definition penny stocks are stocks priced at less than $5, with a company market capitalization of less than 5 million and are traded over-the-counter or in the pink sheets. That was a mouthful. Now, lets get started with the more interesting facets of penny stock investing.

Smart investors always start at the same place – research. Once you have figured out the amount of funds or the percentage of your portfolio you are going to allocate towards your penny stock positions, its time to scout for a few companies which merit more in-depth research. This is probably where a lot of newbie investors stumble. They get lazy and buy the first ‘hot’ tip that comes there way. That is definitely the wrong way to go about this. Any ‘hot’ tips from now on will go into a folder on your desktop or in a physical manila folder marked ‘For further research’. This is where you will track companies that are worth some investigation. There are few places to start looking for tips or company names:

Screeners

Before you buy your first stock, we recommend looking at 10 different companies first. This will help you figure out the process that works best for you. For some screeners we recommend looking at MSN stock or Yahoo Finance screeners. They will filter out stocks based on your criteria of price, market cap etc.

Alerts

You can subscribe to alerts such as those provided by google news for the key phrase ‘penny stocks’ or ‘hot stocks’. Monitor these alerts for a week and you will come up with a list of websites that offer alerts for free. Most of the time these websites also have additional buy/sell strategies for stock investing. If you like the content and the tips/strategies work for you, look into any paid subscription options they provide.

CAPS ratings

The CAPS is the community of investors of fool.com who rate stocks and talk about different companies on their message boards or their website. This is a great screener because you can leverage the collective intelligence of all these investors. The ratings are on a 5-star scale with 5 stars being the highest and 0 stars being the lowest.

The above strategies are a great way for you to get started. So what are you waiting for?

Where To Buy Penny Stocks Right Now – A Quickstart Guide is a post from: WhereToBuyPennyStocks.net

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Privacy Policy is a post from: WhereToBuyPennyStocks.net