Penny stocks for dummies
Stock investment is risky and penny stock investment could be termed as EXTRA risky. The people new in the world of penny stocks are actually confused about the position of these stocks and require a certain precaution to take to get started in the right manner.
The first rule for investment is that you should never invest any money which you can’t afford to lose. It might appear like we’re talking about gambling but it is actually the right thing. You can be attracted for penny stock investments as there are many stories flashed on the web and even the newsletters about the people who have become millionaires after getting returns from penny stock investments. There are of course such stories in real but those cases are just 2% and the rest of 98% of people have got losses due to their penny stock investments.
The next rule for a penny stock investor is that they should apply due thoroughness before selecting the stock list to buy. You need to learn the stock buying techniques and make the appropriate deals for stock investing with your own theory of buying. The fundamentals, latest news, and similar aspects are important to consider for a company that requires your attention. The major problem with penny stocks is that there is the least information available about the companies on OTC boards or Pink Sheets. The investors need to make their own efforts to bring the records from various sources and get ahead with the most promising stocks available from the bunch of thousands of options available. The answers to these questions must be searched to make the right investigation:
- What is the service/product range developed/manufactured by the company?
- What is the number of stocks trading every day?
- How old is the company?
- Who are the competitors of the company?
- Why do you think that the company has higher chances of growth?
- Does your intuition tell you that the product or services associated with the company are on the track of getting the right growth in their segment?
The dummies should check out the real allocation of the stocks and find out the right amount of money to be invested in the stocks. Your own homework is very essential to make a forward movement towards your stock purchases. A wise investor would invest in various options as per the different percentages. The penny stock investments should be given the lowest percentage of money for investment as it could be compared to the gambling of stocks. Penny stock activity is the most important to deal with the information of the company and get a consistent source to go through their actual information. Penny stock letter and subscription is the right source for the investors to obtain the company information. After all, it is the matter of your hard-earned money and you can’t just take another people’s opinion without thinking of your own. Penny stocks for dummies are highly fascinating and should be purchased with full caution.