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Analysis - Why Trade in Penny Stocks???


The Penny Stock Advantage


“Taking a flyer” on a penny stock can return extraordinary profits to the wise. Only a few cents’ increase in share price gives a high percentage gain. The same multiplier that makes penny stocks so attractive when one is winning works equally efficiently in reverse when a share’s price drops. So, it is vitally important that missteps be minimized. Picking the single “best one” among the thousands of “not institutional investment grade” listed stocks is near impossible for most individuals. Making “blind” choices contributes to the “pennies” getting a reputation for high risk. For that reason, successful players never put all their eggs in one basket. They seek to invest in multiple baskets! The smart ones sell when the momentum has run out. At that time some or all of the gains are shifted to new opportunities with high percentage, early, “small move” yields.

 

Small enterprises in North America are forging ahead while the giants are becoming bogged down in international struggles and mental inertia. Increasingly, investors realize that high yields and an occasional loss from junior company equities are better than perpetually earning two percent from “not so safe anymore” bonds.    

 

Many ways of picking stocks with potential for a spectacular rise do exist. Success in penny stock picking requires keeping aware and trading shares in a timely manner. Free advice sources can help pick winners. A typical source is, “my cousin’s girlfriend’s uncle says, buy xxxx”. This can be an excellent tip if you are drawing on some special knowledge on Uncle’s part. But how many wise uncles do your cousin’s girlfriends have? Sometimes too, Uncle’s advice reflects only that he owns the stock and needs others to buy it from him. You are unlikely to hear, “sell” from him.

 

A person can respond to ads, visit a chat room, read blogs, or go to broker sponsored seminars. But searching the net, following up on ads and attending investment meetings is time consuming.  The good part of these is that there is no hiding the bias of the advice giver. But associated “warts and wrinkles” are not always frankly stated. The sources are sincere. But they may miss important facts because of their narrow positive focus. Their track record and competency in analysis usually are second to their promotional ability.

 

Brokers provide more sophisticated investment advice. Most of it targets large, wealthy investor accounts or institutional clients. Such clients are less willing to take risks. Some are prohibited by law from investing in junior companies. Wide penny stock coverage usually does not exist in most brokerage firms. 

Successful penny stock players pay to have a choice from a great variety of stocks. They need a broad spread of opportunity names. They need timely, well-researched facts about companies. They need to have smart input for a variety of industries. Having the best info about mining activity is useless when the stock market’s “flavour of the month” is high tech stocks.

 The best for-sale information sources are those with the largest following. Whenever they make a recommendation it tends to be self-fulfilling. As their numerous clients evidence interest in a company or sector, the purchase activity attracts other investors and the shares rise. The early-in birds then get the early (and extra) profits. The wisdom in realizing early results is the topic of a stock market truism jingle that says, “Bulls make money and Bears make money, but Pigs get slaughtered”.

 

So how does one get to be a Bull? It is easier now than ever before. Because the internet exists, a subscription to an e-mailer advice source gives all subscribers an equal chance in the timing of advice arriving. The benefit of taking action early after a recommendation is made is self-evident. Here is where a specialized news service shines. The service can be evaluated. Does it increase the number and quality of choices offered? The measurement of timeliness of advice, merit of ideas provided and whether they make you money can be determined within the time frame when the subscription can be cancelled and your subscription  payment refunded. Look at the charts provided, examine the graphs, the history. Study trade volumes.

 

The bottom line is that a service with many paying subscribers can afford to do full-time research on companies that typically never get a look from a professional analyst until long after they are a proved success. Subscribers who test the advice provided should immediately see advantage in having their money guided by the same principles used to evaluate senior stock issuers. The volatility of the markets over the globe is incredible. Crisis after crisis befalls this earth. It disturbs the traditional order. In the midst of such disorder the ability to realize numerous high ratio capital gains invites greater attention to be directed to investing in the junior companies.

 

Who is to say? You may find another APPLE in the bunch! The catch is - how many will be wise enough to hold their entire position?  But as the canny Scots say, “Many a Mickle makes a Muckle”.

So CLICK HERE and try the Egghead.

See if he can help you make a Mickle!  


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