Penny stock picks guide
By Mansi gupta
To gain from the investments in Penny Stocks, which in itself is a very dicey investment option, you should be very careful about what to pick and what to avoid. Penny Stocks which boasts of converting small capital into big fortunes are primarily those publicly traded stocks that are presently trading under $5 per share. They attract both the traders as well as long term investors because of the small amount of capital required to make substantial gains.
Most of the Penny Stocks are traded on NASDAQ, Pink Sheets or on the Over the Counter Bulletin boards. However, the Penny Stock companies should not be considered inferior in any sense to those traded on major exchanges. In fact, many of them have better growth rates than some of the NYSE stocks and promise handsome returns on petty investments. Yet, you need to do your homework and gain knowledge about these companies to profit from them. Penny Stock picking sites and bulletin boards often assist traders in finding emerging companies but getting influenced merely by the impression created by these sites and getting entangled into the hype generated by the phone salesmen or professional promoters hired by some companies for this job specifically, can lead to disastrous consequences.
As a wise trader you should always avoid those penny stock picking sites which use false advertising and misleading statements which project unrealistic gains, such as, "this stock will go up 10000%" or "this is the greatest company ever". Some sites even project a false history of their successful penny stock picks. Also, ignore the sites and advertisements that use appealing words like "guaranteed", "for a limited time", "we have insider information", etc. Those Penny Stocks, which guarantee good returns usually never, perform well. This kind of false propaganda can also be witnessed in bulletin boards and chat rooms. More often than not this hype is created by novice traders attempting to make their stocks rise or by the paid representatives of the companies making misleading statements in order to keep the price per share higher while the company dilutes. Thus, it is recommended that you should personally collect all the information about these stocks from reliable resources and should invest in them only if you personally feel that they are a good investment.
Investing in tumbling Penny Stocks in the anticipation of gaining later when these stocks will start performing well should also be avoided, as many of them never recoil. Moreover, you should also ignore those companies that engage in low volume trade and those which offer you stocks without charging any commission. For the reason that it will be very difficult for you to buy or sell those Penny Stocks which trade in low volume, at desirable prices; and the commission free stocks are as a matter of fact, never commission free, as these companies charge their invisible commission either by selling you their stocks at an arbitrary amount or at asking price rather than at bid price.
Hence, you should apply your own diligence and not get influenced by the false hype and propaganda, and pick those penny stocks, which can really convert your pennies into big money.
About the Author
Mansi gupta recommends that you visit http://www.pennystockbook.com/picks/index.html for more information on Penny stock picks.
Article Source: http://www.simplysearch4it.com/article/30761.html
|If you wish to add the above article to your website or newsletters then please include the "Article Source: http://www.simplysearch4it.com/article/30761.html" as shown above and make it hyperlinked.|
| Some other articles by Mansi gupta|
|Traveling tips in Europe|
Europe has always been a dream destination for tourists. With high skyscrapers, world's most beautiful beaches and rich cultural legacy, there is nothing more to desire form a perfect getaway destination. Majority ...
Southern Comfort in elegant limousines
Limousines are the last word in elegant road travel. There are many services across America that run chartered services and you can charter limousines from them during your stay in the city. ...
The Importance of Multivitamins and Vitamins for Women
Whether you're trying to have a baby, already pregnant, going through menopause or worried about osteoporosis, it's worthwhile for you ...
Ma Huang - Chinese herb
Ma Huang, the native-Chinese herb used in fat-burning supplements and also known as Ephedra, has been used as a natural treatment for a variety of illnesses spanning the past five thousand years. ...
Hoodia - what it is, what it is used for?
Deep in the Kalahari Desert in South Africa a prickly like plant called Hoodia grows that could literally take your appetite away. Although this plant ...
Student loan consolidation guide 101
The constantly escalating fees as well as the competition in the field of higher education have made the life of a student burdened by debt. ...