Getting a good penny stock takes a bit of leg work, some research, impeccable timing, and maybe even a little luck. Penny stocks, also known as micro-load stocks, are stocks traded through off the major exchange for significantly less money than traditional stocks. These stocks generally trade at less than $5.00 a share. Since these stocks are traded “over the counter”, most investors buy and sell them without a broker. This requires investors to do some research and develop and implement a comprehensive investment strategy to protect against big losses. Good penny stocks offer investors willing to face a riskier, more volatile market a chance at a bigger reward.
Many websites are dedicated to researching and analyzing these stocks. These analysts pay close attention to a company’s liquidity, debt ratio, equity, and assets. Since these stocks are not traded on the traditional exchanges, they are subject to less rigorous filing and listing requirements. This makes finding good research on them difficult. In addition to utilizing this stock tip websites, you can research good penny stocks on sites like Google Finance and Yahoo Finance.
Many websites specializing in good stocks offer you access to their chat rooms and discussion forums. This gives a potential investor an opportunity to hear about the experiences of other investors, and perhaps an opportunity to see their trading portfolio. You generally need to pay a small monthly or yearly subscription fee to get access to the sites recommendations and chat functions.
Many analysts are recommending these stocks that are poised for big growth over the next few months. Gaming systems, social media support, beverage companies, and power and natural gas companies are expected to make gains over the next few months. For investors looking for good penny stocks, they should follow some national and regional trends and keep an eye on companies looking to make big moves.
We at Paradigm Capital Management believe that finding good penny stocks are only the first part of the equation. These stock traders must have a disciplined approach to buying and selling these volatile stocks. Since these stock investors are generally not using a broker, they must stay on top of their picks. These stocks can gain and lose value much quicker than more traditional stocks. Utilizing stop orders is one way to stop the hemorrhaging from a stock losing its value. Keeping your stock portfolio is also important, so don’t invest all your money in the same company or field.
Investing in good penny stocks is not for every investor. To successfully play the penny stock market, you need to have a high tolerance for risk and volatility. Investors who can handle the extreme up and downs of this market can make a good deal of money for a smaller than average investor. As with any investment opportunity, it is important to understand the risk involved and prepare accordingly. Good, independent research, expert analysis, and your own common sense and intuition can go a long way in making your penny stock investment a profitable one.