When it comes to penny stocks beginners will be encouraged to discover an array of investment possibilities among the plethora of small cap companies priced to sell. “Small cap” means small market capitalization. Relatively speaking, a small capitalization is $300 million to $2 billion. As the name implies, shares in these companies stocks are measured in the pennies to a couple of dollars each. Because of the low price institutional stock purchasers like insurance companies, pension funds and mutual funds are not able to participate in these trades. Because the “big boys” are not involved the price to buy in is very attractive.
With penny stocks results of 98 per cent gain in 4 days and 45 per cent gain in under 48 hours are real possibilities. Early gains, however, do not always indicate a short term investment. Many great penny stock picks have turned into reliable longer term investments seeing increases of as much as 41 percent in year-over-year revenues.
Penny stocks span all sectors from mining to bio-tech to communications. If you’ve got a bit of the detective in you, you’ll really enjoy penny stocks. Analysis is key in this realm. Keeping your ear to the ground and your eyes on the news feeds you’ll learn to spot trading opportunities with exceptional market potentials. By paying attention to corporate announcements such as huge land acquisitions, major news of pharmaceutical discoveries, or unbelievable innovations in the tech industry you will grasp the golden thread and begin your investigation into the companies at the heart of these opportunities.
Analysis begins with financial statements better known as “earnings reports”. These reports are announced every three months and are also known as “quarterly reports”. Next, check out the corporations trading charts at http://www.barchart.com, their free membership provides many advantages including news, education and price alerts. Membership on Seeking Alpha, also free, will uncover all manner of mindblowing corporate news and information to get those ideas turning. Go to http://seekingalpha.com/. The best paid membership for help with your penny stock trading is Penny Stock Prophet. For opportunities that eluded you or confirmation of your own analysis, Penny Stock Prophet will open your eyes to the trade, guide you through the investment process and even schedule the timing of the trade for you. All you have to do is show up.
The balance of this page will be dedicated to my recommendations for software, books and guidance from the best newsletters out there to support your Penny Stocks trading adventure. Don’t be afraid. You can depend on yourself to learn what you need to learn and to invest your money in an informed manner, and having fun while you’re doing it is definitely allowed.
I’m always interested to know how you’re making out with your investing so please leave your comments below.
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