Advice Before Buying Penny Stocks

Thu, Jun 18, 2009

Penny Stocks

Before buying penny stocks - make sure that they are not likely to go  bankrupt

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1. assets vs liabilities is very nice, but more important  is liquid assets, cash on hand, etc.

2. Check out Tinystock Caution list.  Learn what to look for and reasons to avoid certain stocks there.

3. Gauge the “hype” via message boards, etc. Hype has an awful lot to do with penny stocks. Analyze the news on the stock! A “good” penny stock company knows how to feed tidbits of good news all the time. A bad one never puts out news. Some only put out bad news…

4. Watch volume–make sure it is not a “selling off” before buying! Volume over 1 million is often a good flag! Buy into one with less and you may find it very hard to sell.

5. Buy a penny stock lower than today’s price if possible…Just have patience and leave an order good to cancel, or nothing, and WITH a LIMIT PRICE.. Never, ever place a MARKET order or you may pay 2-3 times more than you wanted to. Usually buy near the 52-week low!

6. Look at getting out after your penny stock doubles your money, or selling one half - which puts you in a very good position… We like to sell 1/4 off after it doubles.

If you found this article useful, you can also get tons of free investment advice and great finance tips at Invest Money Stocks.

 

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This post was written by:

Richard Tyler - who has written 467 posts on Free Investment Advice.

Ignorance is often the reason why some people are unable to harness upon what they already have to make more money while some 'in-the-know' get richer every year simply through investments. Invest Money Stocks strives to be a wealth of knowledge for those who need help in investment and wealth management matters. Invest Money Stocks covers a wide range of topics from business management, home budgeting, personal wealth management to stocks investment, options trading, penny stocks trading, forex trading, bonds, technical analysis, fundamental analysis and more.

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