Thursday, April 7, 2011

Making An Investment In Penny Stocks - The Simple Way To Make Enormous Profit From Tiny Beginnings

By George Priestley

Investing in penny stocks is all about defining the rules and playing by them as all of the big time investors have before you.Big time stock traders and investors have played by the rules and started out small, or even very small, swearing by a defined set of rules that basically state they will not continue any cycle of failing that loses them money, over and over. Losing money instead of learning these rules is something that is unacceptable and potentially crippling to a new investor - even though your brain is trying to tell you that "Heck, it doesn't matter, they're only Penny Stocks after all!" (Damn you brain!!) However, follow a few simple rules and you should be ahead of the penny stock investing game. Number One and MOST important - Never, ever, under any circumstance borrow money to invest; this is possibly the biggest rule to stay out of investment trouble.

Yes, I know! You believe you have the advantage with some inside info that might help you build a big portfolio in almost no time! So have lots of others before you - and they were all WRONG! Please, don't jump on a tale with the sole answer being borrowing cash. If you begin to lose cash on the exchange, then the debt repayment will come at once out of your pocket. If this occurs, trust me - you're now in big difficulty.

Regardless of whether you start to earn money then you'll be spending it to pay back the loan instead of saving or reinvesting the funds. This cash will stand by and plague you as you continue to try and get by off the stocks you are trading.

Always save up to be in a position to invest as a rule, debt will be chased until you eventually catch up by being further behind than you were to start with. Do not do IT! Making an investment in profit-making firms is a massive rule to keep under consideration when making an investment in penny stocks.

I'm of the opinion that reads and sounds deeply mad and a waste of breath but trust me - occasionally folks simply invest in a company without determining if the company is profitable or not. Either they like the name itself - or the product / service the company offers - or maybe they know a cousin of the chief of the typing pool and reckon it's keeping it in the family! Do not be the sucker that buys a stock and then tunes in to the TV or logs on to the web to see that its quarterly revenues are down and its money per share is dropping like a four-ton stone of the Empire State building - terribly hard and awfully fast ). Find info on the way to find a moneymaking company, it is generally available on the web, and then identify which company to make an investment in.

Guides for a technique to guage firms, their accounts declarations and markets are freely available. Also, do your homework, research and research prior to buying a stock that isn't gathering any sort of attention. One of the most significant things for stockholders to take a look at is volume, anything less than 1,000,000 shares each day isn't worth touching. It's a useless task to buy a stock that's trading nine thousand shares a day because it's going to be virtually impossible to sell when you are prepared to do so. Stocks need a little attention to have liquidity, which fundamentally means for it to sell it must have value. Do not be stuck with a rising stock that you'll not be able to sell later on.

Don't simply thinkof all of the wonderful profit you will generate - consider the workings of actually having the ability to realize that profit. After all - so what if you have made $1.20 per share in a quarter - if you can not actually sell them! Oh - and in the event you forget! DON'T BORROW Money FOR INVESTING!!

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