Article Categories
» Arts & Entertainment
» Automotive
» Business
» Careers & Jobs
» Education & Reference
» Finance
» Food & Drink
» Health & Fitness
» Home & Family
» Internet & Online Businesses
» Miscellaneous
» Self Improvement
» Shopping
» Society & News
» Sports & Recreation
» Technology
» Travel & Leisure
» Writing & Speaking

  Listed Article

  Category: Articles » Finance » Investing » Article

One a Penny, Two a Penny, Hot Penny Stocks...

By Maureen Cook

The peddlers of hot penny stocks today peddle their wares much like the hot cross bun streetsellers of the 19th. Century. They don't exactly hawk their wares round the shopping malls crying out "Get your hot penny stocks tips here", but telemarketers and professional rumor mongers are making sure that you get their message loud and clear. The message is the same – buy my stock – it's just the medium that's different. The telephone, newsletters, the internet and word-of-mouth are the vehicles used to ensure the message is heard.

The old streetsellers were certainly streetwise; two a penny buns were seen as bargains to be snapped up before they went cold. Bought too many? The nursery rhyme offers a solution: "If your daughters do not like them, give them to your sons". Buy two a penny hot penny stocks and that's what you are likely to be doing, too: giving them away because they'll be almost worthless. Two a penny hot penny stocks sell like hot cakes only because the hot stock tip comes from unscrupulous promoters eager to spread the word that the stock is about to go through the roof. You won't make a killing, but the promoters who pocket your money will.

Let's pause for a moment and reflect on why anyone would want to go around circulating these rumors or peddling 'hot penny stocks' over the 'phone. It just doesn't tally with human nature nor with the way in which power operates in the real world. Just think about it: isn't it far more likely that a small number of self-interested individuals are intent on dumping over-the-counter stocks onto you? Why, if they had genuine information on a hot penny stock about to take off, would they want to share it with you?

It's perhaps a truism to say that knowledge = power = money, but in the real world it's also true that individuals who wield the most influence and power, and incidentally tend to make the most money, operate quietly behind the scenes. That's not to say that these background figures, who buy and sell stocks over the counter, necessarily operate "under the counter". Nor is it true that there's no such thing as a good, informative penny stock newsletter. However, it does mean that, when being harangued by a zealous telemarketer to part with your money, you can be sure that a sinking company and a few unscrupulous individuals are lurking in the background.

Perhaps, though, you see two a penny stocks as providing a real opportunity to get in at the bottom and then make a big killing? Perhaps, when a stock has dropped, you might think that the only way to go is up? Don't get fooled, though, into buying "bargain" stocks solely because they cost less than before. They could continue to sink without trace. As children we must have been extraordinarily prescient when we added an extra line to the nursery rhyme and chanted the virtues of four-a-penny bargains: "If you haven't got a halfpenny, a farthing will do". It won't do, though, if you're buying hot penny stocks. Don't ever feel pressured into buying a "bargain" that will almost certainly end up virtually worthless.

If you still think that you're acting rationally in buying hot penny stocks then you're behaving exactly as our 21st. century streetsellers would wish. But, remember, you're not a consumer buying hot cross buns: you're an investor aiming to make money by buying and selling hot penny stocks. Buying two-a-penny hot cross buns might make some sense, but two-a-penny hot penny stocks can mean buying, but not selling, for the price you want.

Not only selling but buying, too, becomes difficult when stocks are being traded at very low volumes but, at the same time, are being flagged up as the next hot penny stocks tip. A consistently high volume of traded stocks is absolutely essential, preferably on a daily basis. Average figures might seem good enough, but can often mask one insider's buying and selling activities. Lack of trading opportunities precludes any chance you might have of becoming a rational, educated trader as you will not develop a "feel" for where the stock is heading.

Learning how to become a rational, educated investor takes time. There's no easy shortcut to the undoubted profits which exist in the market. Those individuals who want to reduce the risk of their hot penny stocks investment must be proactive and subscribe to a newsletter, research companies, and track investments.

Only when they feel comfortable, and have set themselves a limit of 20% of their portfolio to invest in hot penny stocks, should they prepare to do quiet battle with the market and silence the two-a-penny hot cross bun merchants.

About the Author
Maureen Cook gives you a clear understanding of Hot Penny Stocks. She signposts the beguiling words of the tipsters, and the dangers inherent in trading penny stocks. To find out more, visit:

Article Source:
If you wish to add the above article to your website or newsletters then please include the "Article Source:" as shown above and make it hyperlinked.

  Some other articles by Maureen Cook
Debt: Self-Help or a Credit Lawyer?
"Annual income twenty pounds, annual expenditure nineteen pounds nineteen shillings and sixpence, result happiness. Annual income twenty pounds, annual expenditure twenty pounds and sixpence, result misery". Mr. Micawber's remarks on ...

Real Estate - Laying the Foundations for Buying a Home
Build a house and you start with the foundations. Seems pretty obvious, doesn't it? But buy a house and too many people focus just on what they see above ...

  Recent Articles
Making an offer on an Irish Property
by Clint Jhonson

How To Search California State Tax Lien Records
by Zach Parker

Buying a House at Auction is Very Good Investment
by Kotia Kot

The Future of Gaming is here, why the Video Game industry is reaching new highs.
by Jonel Cordero

All The Relevant Details About Remortgage Quotes Uk
by Turk Malloy

How Investment Property Helps You Retire Early
by Marian Rozwenc, PhD

How To Overcome The Hidden Perils Of Discount Online Stock Trading
by David Jenyns

Advantages of Long Term Investing and Compounding Interest
by Ohad Livne

When And When Not To Use A Stop
by Larry Potter

Passive Investing - How To Grow $250.00 to $250,000.00
by Gil Washington

Notary surety bonds preventing failure
by rick martin

Online Trading India - Investment at Kotak Securities!
by Tanya Lobo

Shanghi Shows Signs of Gold Boom in 2007
by John Christensen

Covered Call Trading Exit Strategies the Pain of STOP Orders
by Mat Merten

"Gold, a Hedge Against the Perils of Uncertain Times."
by John Christensen

Three reasons to love uranium ...
by Sean Brodrick