Penny Stock Success: Tips for Investing in Cheap Stocks by Jim Kerry

Penny Stock Success: Tips for Investing in Cheap Stocks

byJim Kerry

Kobo ebook | May 23, 2013

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Table of Contents
Income/Medical Disclaimer 3
Liability Disclaimer 4
Terms of Use 6
Dedication 7
Penny Stock Success: Tips for Investing in Cheap Stocks 9
The Penny Stock Fallacy 10
Penny Stock Trading Tips 12
Ways to Trade Penny Stocks 15
A Fortune for a Penny? 21
Additional Resources 24
Video Resource Links 25
Conclusion 26
Penny Stock Success: Tips for Investing in Cheap Stocks

Penny Stocks 101

The what-so-called "penny stocks" and "micro-cap stocks" are used interchangeably. Technically, micro-cap stocks are classified as such based upon their market capitalizations, while penny stocks are looked at in terms of their rate. Meanings differ, but in general, a stock with a market capitalization in between $50 and $300 million is a micro-cap. (Less than $50 million is a nano-cap.) According to the Securities & Exchange Commission (SEC), any stock under $5 is a penny stock. Again, definitions can differ; some set the cut-off point at $3, while others think about only those stocks trading at less than $1 to be a penny stock. We think about any stock that is trading on the pink sheets or non-prescription publication board (OTCBB) to be a penny stock.

The Penny Stock Fallacy

The Penny Stock Fallacy

2 usual misconceptions pertaining to penny stocks are that many of today's stocks were as soon as penny stocks which there is a positive relationship between the varieties of stocks an individual owns and his/her returns.

Investors who have actually fallen into the trap of the first misconception believe Wal-Mart, Microsoft and numerous other big companies were once penny stocks that have actually valued to high dollar values. Lots of investors make this error due to the fact that they are looking at the "modified stock price," which takes into account all stock splits. By having a look at both Microsoft and Wal-Mart, you can see that the particular rates on their first days of trading were $21 and $16.50, despite the fact that the costs readjusted for splits was about eight cents and one cent, respectively. As opposed to beginning at a low market price, these businesses really began high, continuously increasing up until they should be split.

The 2nd reason that lots of investors might be attracted to penny stocks is the thought that there is more space for gratitude and more chance to own even more stock. If a stock goes to 10 cents and increases by 5 cents, you will have made a 50 % return. This, together with the fact that a $1,000 investment can purchase 10,000 shares, encourages investors that micro-cap stocks are a fast, surefire way to enhance revenues.

Title:Penny Stock Success: Tips for Investing in Cheap StocksFormat:Kobo ebookPublished:May 23, 2013Publisher:P MaldonadoLanguage:English

The following ISBNs are associated with this title: