Penny stocks are not for everyone. For the risk averse and investors seeking high and quick returns, penny stocks are not likely to deliver. However, they can be a valuable commodity and many a broker or investor will likely be able to identify what penny stocks are likely to grow over time, and which stocks will not return on investment. What are penny stocks? A stock trading under $5 is or share trading under $1 can be defined as a penny stock or share. These are sometimes referred to as Nano stocks as well. These stocks define the company’s market capitalization, which will vary from overall stock prices.
The companies that offer penny stocks are often small scale successes in their own right. Microsoft and Google need not apply. Valuable companies happen over time and do not appear overnight. Companies at this stage are offering penny stocks. While some investors may believe that sifting through penny stocks offers a way to “hit it big” in the stock market, this is unfortunately not a proven strategy to success. Penny stock investors must be consistent and invest for lengthy periods of time. This strategy will prove to be unsuccessful in most cases.
Value and Bidding
The spread value of these types of stocks round out to about 25 to 33%. They can sometimes even fall between 50 to 100%. Bidders are allowed to place inside and outside bids on penny stocks. The outside bid and ask are generally of greater value to the bidder. There are no single rate prices at which penny stocks are bought and sold, but rather, a number of different prices exist. Navigating the prices and spreads of these stocks should be done with an experienced broker as prices can sometimes be misleading.
Brokers make their money on the spread, in addition to taking advantage of buy and sell times. The difference between the bid and ask price is known as the spread. Penny stocks are known for markups in pricing due to broker’s accounting for the risk associated with the stock and price fluctuation. This can make for a complicated process when deciding on what penny stock is safe for investment. The best way to get into these stocks is through an experienced broker that is knowledgeable of the potential benefit of investing in a specific penny stock or stocks.
The risks associated with penny stocks are largely due to the lack of information that is known about this micro-market. These stocks are not traded on the stocks exchange but traded in an (OTC) market. This shouldn’t stop interested parties in exploring this very small but valuable market overall.
Everybody needs a place to live, that much is true. But people want the perfect place to live when they make a purchase of a new home. Nobody says to themselves, ‘I’m going to buy a mediocre home someday!” Not a chance. This is why the real estate market has sustained itself over the decades. People will always need a place to live and they aren’t afraid to pay for the home they really desire. This is one of the key motivations of real estate investors. They know this fact. The difference is, they capitalize on it.
So what are some of the reasons to invest your hard earned dough into real estate?
Tax Depreciation can be a big factor come tax time for deductions of expenses such as interest payments. This can help to maintain a hefty income for your bottom line. Another key thing to remember is Equity Build Up as you make the mortgage payments regularly, -Amortization- will reduce the outstanding balance while using the principal interest to reduce the debt, slowly making you rich in the process.
Anyone in the real estate business can tell you that the Long Term Profit is the payoff here. There is an added security in knowing that your investment is maturing and growing while you sleep. It is a great way to establish a sturdy financial foundation to build upon. Some of the strategies you can implement as well are to invest in rental properties that will give you that residual income to reinvest into growing you finances. Many have found success with the 3 year leasing option, for just one example here. Either way that you go, make sure that there is an exit strategy in place to subsidize and cover bases to secure your financial stability.
Seek guidance from more successful investors, if they are willing to give it to you. This will go a long way in dodging pitfalls and time sponges that may be out there on your path to success. The mistakes of others are often the best stepping stones. Also, make sure to look for valid sources of information yourself and use it before consulting somebody else. Always verify your facts before investing a penny. This should be a good jump off point into more knowledge of investing wisely for your future.
Technology has advanced at warp speed over the past few years. For those that value the art of investing they can now find themselves with access to some of the best Stock Analysis Software. These software programs help in managing and maintaining portfolio investments. As an individual investor you can find access to this software online or at brokerage firms when you open a brokerage account. Many of these firms provide trading software as a bonus.
MetaStock Trader is a favored application. It offers over 300 indicators, integrated news, and important data that is combined with screening and searches to allow you to filter your searches by criteria. It also provides access to global markets and multiple assets. MetaStock is an award-winning analysis tool that has been in business for over 30 years and continues to implement advancements into their programs.
VectorVest has software platforms not just for the US, but also provides offers for those that reside in Australia, Canada, Europe, India, Hong Kong, Singapore and South Africa. VectorVest allows you to try out their software for 5 weeks for under ten dollars at no risk to you. This stock analysis and portfolio management system analyzes, sorts, ranks and graphs over 23,00 stocks every day for you. It also provides additional recommendations on stocks that the client may be interested in obtaining.
For those searching for low-cost or free stock analysis software StockCharts is a well-known option. It is very simplistic and concise. They provide additional tools for a fee such as, historical charting and additional analysis. But, customers can find themselves with free access to many of the tools they need to obtain quality analysis.
Yahoo Finance is a popular and free stock analysis software. It is very easy to navigate. It provides quotes, research, news and market data for your benefit. It also provides a search bar for quotes look up. Access can easily be attained with your Yahoo email account.
In competition with Yahoo Finance is Google Finance. It is equally as easy to navigate. It is concise and clean. Their charting solution for investors is direct. Google Finance provides you with important events that occurred on important days for the stock. You are also able to look back in time and retain a historical analysis for a particular stock.
For the best stock analysis software one must choose the one with the best tools for their particular needs.
In today’s day and age, more average people than ever are pondering the intrigue of both financial wellness and liberty. The trouble behind such an immense contemplation unfortunately triumphs potential ventures an individual would want to take to better themselves as functioning and contributing members of society. Through thoughtful investing, the rewards one can achieve are infinite and life changing. And the exhilaration of owning a piece or two of a company is phenomenal! Such a luxury can only be achieved through stock investment.
Stock is responsible for keeping any company issuing them afloat. As stated before, stock gives investors from all walks of life ownership in a company, no matter how big or small. These investors play a huge role in bringing to fruition many projects and proposals overseen by a particular company. Not only do they, the investors, get to be a part of an inevitable success, they are also entitled to a company’s merits and earnings! Of course, access to such rewards rely strictly on how well a company is functioning. If a company is booming with widespread notoriety and revenue, the chances of investors raking in earnings as a result of their owning stock are very high. And if a company isn’t functioning conducive to expectations, the likeliness of loss as well as folding is great and such an end result is common today.
Some companies, if not all, who issue stock award their investors with dividends, which is the main and common payout given quarterly. Though certainly popular among investors, dividends are not permanently assured and can be ceased without notice. Most investing experts advise investors against spending their earnings and instead to redistribute them back into stock for steady income and portfolio maintaining. Though not common, another form of payment is the coupon bond, which award specific interest payments to holders from borrowers. The set interest is secured regardless of any circumstances that could arise over time, meaning the investor or holder wouldn’t face any loss or set-backs.
Despite the numerous risks of investing, the realm itself is certainly full of opportunity and benefits. A small or grand investment into stock is an investment regardless, capable of helping one realize the depth of their own ambitions while maturing he or she in a financial sense. Within this realm, every possibility is infinite, but one must play the game right in order to succeed.
A penny stock is almost a fabled thing, much like a unicorn or a Miss America contest winner. The celebrity of being a penny-stock winner is just one of the many reasons that penny-stock investing has gained in popularity over the years. There are various reasons, some good and some not for why one might consider getting involved in the high-risk, high-potential-gain stocks in the “penny arena.”
For any readers that are familiar with hearing the terms penny stock but aren’t fully aware of what that means, let’s do a quick recap: Essentially a penny-stock is something little more than a stock whose price is low. If a stock price is over a dollar, typically it becomes disqualified for being considered a penny stock, but being at that price level alone isn’t what makes a penny stock. The other consideration is the fact that the company is usually a startup with a high potential growth possibility. Typically penny stocks that gain a lot of attention are around companies doing research and development in new experimental technologies, medicines and breakthrough inventions.
Based on what we’ve stated so far, it is already starting to sound like a penny stock investment is a really good idea. Whether it is or not has a lot to do with how you look as an investor. If your starting capital is too low and you have a shorter time frame in which you are hoping to receive the return, you should perhaps consider if you have the ability to stomach a loss, should one of your penny stock bets fail. If the answer is no, then penny stocks is probably not for you.
The typical commonplace wisdom about penny stocks are that they are always a bad idea and are a sure-fire way to lose your entire investment capital. Despite the fact that this is the traditional wisdom, countless investors are still flocking to the asset class, but why? The answer is simple and clear: Penny stock investors are a breed of investor that probably also frequents the casinos and the horse tracks. Too addicted to the thrill and legend of a massive win and perhaps too obsessed with the risk of failure as well, the penny stock investor is surely their own breed compared to the blue chip stock investor. What type of investor you decide to be will have everything to do with your values and goals as an investor. Make sure you decide which investment classes are best for your own personal situation.
Getting started in investing is not an easy task for most people. Many investment accounts have required minimum deposits. In addition, a lot of new investors are not sure where to invest their funds. They may be intimidated by the whole process of investing. Leaping into the market, even in a favorable environment still involves risk, and it’s hard to know where to begin.
The first step in getting started with investing is to open a brokerage account. This is the best strategy for new investors. The key is to choose a recognized, skillfully managed platform that offers a choice of low-fee, no-commission exchange traded funds. Traditional brokerage firms include Charles Schwab and Merrill Lynch. These companies offer personalized services. Discount brokerage firms, such as E-Trade and Ameritrade, are a low-cost alternative to traditional firms. Each of the discount firms offers low commissions and online platforms that are easy to use.
Exchange traded funds are good funds to start with as buying and selling exchange traded funds is usually cheaper. These funds can also be bought or sold at any time of the day; therefore they are fairly accessible to a beginning investor.
Here are a couple of things to consider in regards to investing:
High fees and commissions significantly reduce profits. Therefore, it is important to think about transaction and commission fees carefully. Online brokers usually charge a fixed, fee for each transaction. Exchange traded funds can cost as little as $2.95 per transaction or as much as $9.99 each. It makes sense to shop around. When trading exchange traded and mutual funds, it is important to also consider the expense ratio as this factors into profit.
Keep in consideration the possibility of inactivity fees, service fees, and other costs. It’s possible to find brokers that don’t charge these types of account fees; those brokers let you keep more of your money.
New investors should consider choosing a brokerage that offers the option of setting up easy automatic monthly withdrawals from a savings or checking account to your brokerage account. This is an easy, relatively painless way to start building up even more investment savings.
Knowing how to invest is very important. Beginning investors can learn a lot from the research and educational tools that are provided by brokers. Sites such as E-trade, TD Ameritrade, and Scottrade offer a number of online research and educational resources and tools to help you choose wise investments.
For the uninitiated understanding a stock chart may seem like an exercise in dark magic, but successfully trading stocks starts with learning how to read a stock quote and comprehend the lingo. A typical stock quote includes several numbers that provide a look into a stock’s recent activity, and once you understand the numbers you have a better chance of figuring out if the security is a good investment.
When reading a stock quote the first things to look for are the “bid” and “ask” prices. The bid price is the amount you can sell the stock for and the ask price denotes to the price you can buy stock for. For example, assume Acme stock has a bid price of $95.85 and an ask price of $96.10, a 25-cent difference between the bid and the ask. This is the “spread” and signifies the money the stock exchange makes from a trade.
The “52-week high” and “52-week low” help investors put the stock’s current price into perspective against it performance over the past year, as these number reflect the prices of the stock for the last 12 months.
The stock’s “market capitalization,” often referred to as market “cap” for short, refers to the number of shares of stock the company has in the market that are available to be bought and sold, multiplied by the stock’s current price.
“Vol” on a stock quote stands for volume which indicates you how many shares of stock traded hands for any given timeframe. Sometimes a stock quote will display a volume figure for the current trading day, called a “session,” and a second number which is the average volume over a specific timeframe, such as 30 days.
“EPS” stands for Earnings per Share and signifies how much a stock earned per share during the last three months of trading.
Similar to the EPS, the PE Ratio is the Price-to-Earnings Ratio and compares the stock’s current price to the stock’s recent earnings. The PE Ratio is a metric investors typically use to measure whether or not a stock’s price is overestimated.
The “sector” denotes which industry, such as health care or public utilities, a stock is in and helps to understand what other companies a stock is in direct competition with.
Most online stock services include charts, stock-market news, analyst reports and company profiles, and this information will help give you get a much clearer picture of the company and its stock, the stock’s sector and the industry the sector represents.
Penny stocks may sound insignificant, but they truly can be very lucrative if you invest wisely. However, penny stocks are a gamble just like any other sort of stock investing and if you want to be successful, you have to have a game plan and be very savvy at the same time. Here are some tips you can utilize to increase the likelihood that you will be successful in your penny stock trading.
1. Be Content with Small Wins
With penny stocks, you are dealing with much smaller increments and the basis of large profiting is based around trading large volumes of stocks. There is a learning curve that is involved and it is important to celebrate the small wins and then replicate them.
2. Walk Before You Can Run
Although trading penny stocks, as well as any other types of stocks is truly based on one’s ability to analyze a market and make accurate predictions based on patterns, there is an element that is more like an art form which needs to be learned over time. You need to get a feel of when to make a move and this can only be obtained with patience and practice. Therefore you should start with small increments until you hone in on your craft.
3. Record Your Transactions
You should always keep a record of every trade you have made so you can go back and study them. Trading penny stocks is a game that is based around trends and having a record to look back over and reflect on is essential to growth.
4. Trade during Regular Hours
Always make sure you are trading during regular business hours, as after hour trades can be risky and can get you into some messy situations. It is always best to have accurate and up to the minute updates in order to make the wisest decisions.
5. Do Not Over Trade
Many people get in the habit of simply trading because they feel they have to. If there are not any intelligent trades on the board that you feel confident in, simply do not make a move. This is the most underrated element of successful trading.
6. Know When to Get Out
Sometimes people make some bad trades or simply get unlucky and start to trade wildly because of the emotional aspect of the loss. Nothing will get you in the tank more than this and this mindset is sure to make you lose money.
7. Have Fun
It is always a good idea to strategize and be intelligent when you trade, but you should always keep it a fun activity which can also challenge you, which will give you the most rewarding experience possible.
Penny stocks are the definitive high reward, low risk investment opportunity. With this method, it is possible to make a considerable amount of money off of a small investment. Now, it doesn’t mean you are going to become rich quick, and many of the stocks do not have a large amount of information about the company, so investing can sometimes be a bit tricky. With that being said, if you are able to locate the best penny stocks out there and invest in one that is going to have a solid turn around, you have the ability to by thousands of stocks for next to nothing and receive an excellent turnaround for it.
A penny stock is exactly what it sounds like. It is a stock that costs usually a few cents per share. This is a smaller company that is trying to raise money in order to invest back into itself. Now, most major companies with a solid financial backing do not need to do this. All these larger companies need to do is properly crowd source and it has the money it needs. However, with the help of this sort of financial investment opportunity of a penny stock, those businesses without the necessary resources can bring in a good amount of money to start to expand, and expansion for a smaller company can often lead to major financial windfalls for those who invest in the company.
For a large company such as Google or Apple, a stock is going to cost several hundred dollars for a share. This means the average investor might only be able to afford buying 10 shares for a few thousand dollars. If good news hits, the share might rise five percent in a day, meaning the person make possibly $100 on a good day of trading with those shares. However, when investing in penny stocks, if there is good news for the company and if the few hundred thousand dollars the company brought in through penny stock purchases allows it to reinvest into itself properly, it might cause the stock to increase several hundred percent. Should someone invest a few thousand dollars into penny stocks and the stock jumps a few hundred percent, now they increase their stock work by several thousand, if not tens of thousands of dollars, all off of the same monetary investment as the larger companies.
Some stocks someone can look into and invest with include Key Energy Services, SandRidge Energy, Eagle Rock, Energy XXL or Halcon Resources Corp. Now, the most important thing someone can do when it comes to penny stocks is to do their research, just like any other stock out there. After all, a penny stock has the potential to increase financial earnings, but it does also have the potentially to bottom out and disappear. Due to this, knowing more about the penny stock should prove especially helpful when it comes to trading for this kind of a stock and for financial stability for the individual.
The term “penny” stock is somewhat inaccurate, because stocks considered in the penny stock category can have values of as much as $5 a share. Penny stock is more a description of the market for these stocks, which can be loosely-regulated and very volatile. It’s very easy to make mistakes investing in penny stocks, especially if you are a new investor.
1. Falling for the “pump and dump” scheme
A “pump and dump” occurs when some unscrupulous group or person touts false or misleading news about a penny stock to quickly boost its price so they can sell the stock and make quick money. New investors in penny stocks who hope to get rich quick can easily fall prey to these scams.
2. Failure to do research
Companies that are in the penny stock range are there for a variety of reasons. Some are former high-flying stocks that fell after a scandal or a failure to adjust to changing business conditions. Others are stocks in companies that have unproven products or technologies that have failed to produce sufficient revenue. Before investing in penny stocks, it’s important to research the company to know what you are getting into.
3. Failure to understand the liquidity market
Penny stocks often are thinly traded, meaning it can be difficult to sell, either to take advantage of a gain or to limit losses. New investors often fail to understand this aspect and plan for it.
4. Failure to prepare for losses
Many investors see the penny stock market as a way to get rich. By buying a stock at a very low price, the opportunity for profits is endless. But that rarely happens. More often than not, penny stocks keep falling, leading to losses for those who invest in them.
5. Buying “at market”
Because of the lack of liquidity in penny stocks, it’s easy to pay too much for one. A big mistake is putting in an order at market price, meaning, essentially, you buy at whatever price someone is willing to sell. Make sure to put a specific price on your buy order.