As a beginner, you may be a bit worried about getting started with Penny Stocks. These are going to take a different route compared to working with traditional Stock Market and sometimes it is hard to find the information that you need about the company before making the investment that you want. With that being said, it is possible to be successful when using Penny Stocks, you just need to be careful with the decisions that you make in Penny Stocks and take your time to really see results. Some of the tips that you can follow when you get started with Penny Stocks to help you be successful include:
Ignore Some of the Success Stories
When you first getting started with Penny Stocks, you are going to get a lot of information and emails about the success stories of others who have done well with Penny Stocks. These are found on social media sites as well as in emails, but often these are unusual circumstances or the information is all made up.
Instead of focusing on this, you need to look at the Stocks on their own and see if they are going to work for you. Just ignore all of the success stories since most of these will not repeat. Do your own research and learn about the market to determine which ones are the right ones for you.
Read Through the Disclaimers
If you are receiving a newsletter about a Penny Stock, you need to be careful about the tips that you are reading. There is nothing wrong with picking i[ some of the Stocks from these newsletters, but you should be aware that most of them are sales tips and to give exposure to companies that, for the most part, are really bad and could end up making you lose a lot of money.
Most of the newsletters that you are reading won’t give you the full story. The people who are writing them will do so in order to pump out the Stock Price and they are not going to tell you the right time to sell the Stocks. They will work hard to get you to purchase their Stocks, and then you never hear from them again. It is fine to read through some of these to get some information, but when the disclaimers state that these are written as a promotion for one company or another, you know that the tips are more of a sales pitch rather than a good investment advice.
One of the allures that you will hear about with Penny Stocks is that you are able to get a huge return on investment, up to 30 percent, in just a short amount of time. If you want to make a return on investment like this with Penny Stocks, you will need to sell your Stocks quickly after you purchase them. Unfortunately, instead of being happy with the 30 percent or so, people will get greedy and will look to make an even bigger return. Considering Penny Stocks are sometimes getting pumped out and the industry is volatile, you should be happy with what you get or you may lose out on a lot of money.
Be Careful When Listening to the Company Management
You need to be really careful about the people you are listening to, even when it comes to company management of the Stock that you are planning to get into. When the Stock prices are going up, these companies are able to raise even more money and it is more likely they will stay in business. In some instances, they may not even be companies, but basically, insiders who are trying to get rich.
In fact, most of the promotions that you see come from the same group of people who use different companies and press releases in order to get some hype up and make some extra money. They may have purchased the Stocks at a lower price and now want to create a lot of buzz to get you to make a purchase much higher than what they initially paid.
With some good research and being analytical of things you hear, it is easier to pick a Penny Stock that is actually good and make the money you want.
Focus on High Volume
When you are getting started, it is best to only purchase Stocks that have a minimum of 100,000 shares traded each day. If you go with a Stock that is too low in volume, it is sometimes too hard to get yourself out of the position. In addition, experts recommend that you pick Stocks that are selling for over 50 cents a share. Going with a Stock that is lower in price than this may seem appealing, but often these aren’t considered liquid enough to really play with.
Pick the Best Stock out of the Bunch
You should make sure that you pick one of the best Stocks that you can find, especially when you are a beginner in this business. Some experts recommend that you find a Stock that has really good earnings overall or one that has broken out of its average 52-week highs in volume. Some of these are easy to find, but the trick with these is that you want to find ones that have these highs, but not because of a pump and dump scheme. You want the highs to be because others are interested in the Stock and the value is going up naturally, not because of some buzz that is created to inflate the price.
Never Fall in Love with Just One Stock
When it comes to the Stock market especially with Penny Stocks, you can’t fall in love with just one Stock. When you decide that one Stock, and only one, is the only option that you will go with, you are going to end up failing because you won’t look at the Stock in a logical manner.
There are always going to be salespeople who come to you with a great story about their company and will make you fall in love with their product. But your job is to look at something objectively to find out if it is actually going to make you the money that is promised. With some good research and hard work, you will be able to find the right options for your needs without falling prey to others who want your money.
Do Your Research
Before you get into any of the Stocks, you need to make sure that you complete your research. There is not much information that is provided inside of Penny Stocks, although there are a few companies that will provide this information to help you out. This means you will need to get to work and do some research on your own. Look up the company and learn a bit about them including some press releases and other news that surrounds them. You should take a look at the market overall and see where things are going. You can even look at the current Stock and see its history to learn how things are going for the company.
When you finish the right research before making a decision, you will find that it is easier than ever to get the results that you want. You will be able to make informed decisions, rather than just jumping into the mix and hoping that it all works out for the best.
Keep Your Head
If you are new to Penny Stocks, you may find that it is easy to get really involved with the Stocks. You may get too involved, feeling that you need to keep going when you are losing money and getting too upset, when things aren’t going the way that you wanted. It is important to look at all of this objectively and learn how to always keep your head and think critically, no matter what is going on in the market.
For those who lose their tempers quickly, those who have an addictive personality, it is not a good idea to get into Penny Stocks. You need the ability to take control of the situation, no matter what happens, so that you can think critically and make decisions that will help you to make the most money possible with Penny Stocks.