10 Penny Stock Tips
By admin | Monday May 10, 2010 01:29 pm
10 Penny Stock Tips
If you are new in the penny stock market then it is assured that soon you will be able to see triple, quadruple and quintuple gains. The only difficulty lies with investing in penny stock is that, they require lots of researches, which is no more than the effort you put in while investing on their blue chip counterpart., These are 10 essential tips for the newbies in the penny stock market.
I. Think Different:
If it is about penny stock then you are bound to think different. Only out of box plans can reap you unexpected in returns in the penny stock market. The technologies and the business models are completely different in the penny stock market and that defines it all. So the key to profit in your next penny stock endeavor is to think just out of the box.
II. Be Judgmental and Ensure What you Exactly Have
“Know what you own”, this is the thumb rule to remember, as you are an entrant to the Wall Street or planning to invest on penny stock. You must be well aware about each and every aspect related to the company you are investing on. Know the business, know the moneymaking strategies followed by it and even keep an eye on the management functions performed by it. This implies that you must know it inside out. This is important, as the prices of the shares in the penny stock are prone to frequent changes.
III. Don’t Worry be Happy
Even if you see that a hot deal in penny stock is on the mode to take off then do not just end up worrying a great deal and ultimately putting your mind in a confused state. You must always remember that penny stocks are volatile even if they have the potential to give you a serious gain. So, make it a point not to put just about 10% the portfolio. Create an account and put just the amount, which you don’t care to loss.
IV. Be Straight forward to Make Queries
Penny stocks more or less belong to smaller companies, which can give you time to answer all your queries. If you really have a deep drawn question about the prospect of the penny stock then be bold to e-mail or call up the company number to know it. It is still not unlikely, if you end up chatting with the CFO or the CEO of the company.
V. It is Better to be a Skeptic
It is better if you act a doubter. You must always judge the scenario in your perspective. Just be clear to establish the belief that whether the new idea put forwarded by the company is good for you or not. If you have a clear answer then dig deeper into the potential of the company. Your portfolio reaps profit with your skepticism.
VI. Think Hard and then “BUY”
While buying penny stock, always keep in mind that you must always buy large quantity of the stock in a way that it should never consume your gain. In order to find out the minimum returns for having a break even with the help of the given formula,
Price of Execution Fees or Stock Acquisition x 100= Required Break-even Gain
VII. Hold your Greed
Many a time it happens that an investor even after gaining 200%, 500% and even1000%, tend to be a loser at the end and it is only their greed, which play the mischief. It is the common practice by most of the investor to hold on to an investment when they find that it is climbing without any end. So, it is only at the time of analyzing an investment an exit, which is logical point, and the sell figure needs to be determined for that.
VIII. Cut off the Nervousness
If you are not greedy then you must be nervous when you see that good numbers of stocks are picking up gains. Keep your cool and feel relaxed at all time, be if your stock taking off or if your stock is about to lose grounds before it hit the target price.
IX. Bear a Realistic Attitude
Set a realistic expectation. This will lead you to pick up the correct target price and thus the portfolio gets well structured giving a bang to the money you have invested.
X. Prepare and Grab the Next Chance
The secret lies in the fact that you must always be on the go and should be in lookout for the next potential penny stock investment opportunity. Next, you can just meet your “Best”.
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