Investing in penny stocks is all about defining the rules and playing by them as all the massively financiers have before you.
Enormously stock traders and backers have played by the rules and started off tiny, or perhaps miniscule, swearing by a defined set of rules that basically state they won't continue any cycle of failing that loses them money, repeatedly.
Losing money rather than learning these rules is something that's unacceptable and potentially crippling to a new investor - although your brain is trying to tell you that "Heck, it is unimportant, they're only Penny Stocks And Shares after all!" (Damn you brain!)
But follow a few easy rules and you ought to be ahead of the low priced share 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 edge with some insider info that might help you build a massive portfolio in virtually no time!
So have thousands of others before you - and they were all WRONG!
Please, don't jump on a story with the only answer being taking on debt. If you begin to lose money on the stock market, then the debt repayment will come directly out of your pocket. If this occurs, trust me - you're now in big trouble.
Even though you begin to earn money then you will be spending it to reimburse the loan rather than saving or reinvesting the funds. This money will stand by and plague you as you continue to try and earn a crust off of the stocks you are trading.
Always save up to be well placed to invest as a rule of thumb, debt will be chased until you ultimately catch up by being further behind than you were to start with.
Don't Do IT!
Investing in profitable companies is a big rule not to forget when investing in penny shares. My opinion is that reads and sounds very daft and a waste of breath but believe me - sometimes folk simply invest in a company without deciding if the company is worthwhile or not.
Either they like the name itself - or the product/service the company offers - or even they know a cousin of the manager of the typing pool and reckon it's keeping it in the family!
Do not be the sucker that purchases a stock and then tunes in to the television or logs on to the Net to see that its quarterly takings are down and its cash per share is dropping like a four-ton stone of the Empire State building - very hard and extraordinarily fast).
Find info on how to find a rewarding company, it is generally available online, and then establish which company to make an investment in. Guides for how to appraise corporations, their accounts declarations and markets are widely available.
Also , do all of your homework, research and analysis before you buy a stock that is not getting any kind of attention.
One of the most important things for stockholders to look at is volume, anything less than 1,000,000 shares each day isn't worth touching. It is a pointless task to buy a stock that's trading 9,000 shares a day because it will be almost impossible to sell once you are ready to do that.
Stocks need attention to have liquidity, which basically means that for it to sell it must have price. Do not be stuck with a rising stock that you will be unable to sell later on. Do not simply thinkof all of the beautiful profit you may generate - consider the details of actually having the ability to realise that profit. After all - so what if you have made $1.20 per share in 3 months - if you are unable to actually sell them!
Enormously stock traders and backers have played by the rules and started off tiny, or perhaps miniscule, swearing by a defined set of rules that basically state they won't continue any cycle of failing that loses them money, repeatedly.
Losing money rather than learning these rules is something that's unacceptable and potentially crippling to a new investor - although your brain is trying to tell you that "Heck, it is unimportant, they're only Penny Stocks And Shares after all!" (Damn you brain!)
But follow a few easy rules and you ought to be ahead of the low priced share 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 edge with some insider info that might help you build a massive portfolio in virtually no time!
So have thousands of others before you - and they were all WRONG!
Please, don't jump on a story with the only answer being taking on debt. If you begin to lose money on the stock market, then the debt repayment will come directly out of your pocket. If this occurs, trust me - you're now in big trouble.
Even though you begin to earn money then you will be spending it to reimburse the loan rather than saving or reinvesting the funds. This money will stand by and plague you as you continue to try and earn a crust off of the stocks you are trading.
Always save up to be well placed to invest as a rule of thumb, debt will be chased until you ultimately catch up by being further behind than you were to start with.
Don't Do IT!
Investing in profitable companies is a big rule not to forget when investing in penny shares. My opinion is that reads and sounds very daft and a waste of breath but believe me - sometimes folk simply invest in a company without deciding if the company is worthwhile or not.
Either they like the name itself - or the product/service the company offers - or even they know a cousin of the manager of the typing pool and reckon it's keeping it in the family!
Do not be the sucker that purchases a stock and then tunes in to the television or logs on to the Net to see that its quarterly takings are down and its cash per share is dropping like a four-ton stone of the Empire State building - very hard and extraordinarily fast).
Find info on how to find a rewarding company, it is generally available online, and then establish which company to make an investment in. Guides for how to appraise corporations, their accounts declarations and markets are widely available.
Also , do all of your homework, research and analysis before you buy a stock that is not getting any kind of attention.
One of the most important things for stockholders to look at is volume, anything less than 1,000,000 shares each day isn't worth touching. It is a pointless task to buy a stock that's trading 9,000 shares a day because it will be almost impossible to sell once you are ready to do that.
Stocks need attention to have liquidity, which basically means that for it to sell it must have price. Do not be stuck with a rising stock that you will be unable to sell later on. Do not simply thinkof all of the beautiful profit you may generate - consider the details of actually having the ability to realise that profit. After all - so what if you have made $1.20 per share in 3 months - if you are unable to actually sell them!
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For more information on Investment Strategy: The Investor's Principles, please visit our entire set of resources and further articles, including some at Investor Awareness Campaign: A Look at the Opposite Side.
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