Mon, 2 May 2011

12:53 AM - penny stock - Learn About Hot Penny Stocks with Free Penny Stock Picks

Penny stocks have gained popularity because of their potential to increase valuation in a dramatically short amount of time - sometimes in less than a day. Investing in an established company generally requires a long term investment strategy. Penny stock investors are often keen on day trading, or short term investment because of penny stocks potential to quickly double or triple in value. Penny stocks are cheap, generally costing less than 3 dollars a share, making them appealing to people who would like to invest in the stock market but don't have a lot of money to start with. One thing to keep in mind when investing in the penny stock market is that each investment requires adequate research. Cheap stocks can make investors rich, but because of their dramatic spikes and dips it is crucial to buy and sell at the right time.

 

 
Choosing a stock is a tricky process, there's no magic formula that unlocks the mystery of which stocks are about to sky rocket and which ones are on their way down. All stock market investments come with risks. So what should you look for when choosing your investments? Always look at the bigger picture. Is the company in an industry that will be viable in the coming years, or is it part of a dying sector? What is the company's competitive edge? Do they already have a loyal customer base, or are they just emerging onto the market? Do they have a financial history? Always check out their debt to profit ratio. Free penny stock picks are useful because they narrow the focus of your research by finding interesting penny stock companies for you. Just remember it is always up to the investor to make the best decision for his or her personal portfolio, budget, and comfort level.
 
 
If you're new to trading cheap stocks, it's advisable to start with one or two companies to watch. It is generally recommended to add variety to your portfolio, not relying solely on penny stocks as your main source of investment. However, for those willing to do the research, hot penny stocks can return huge gains in a short amount of time. There are different strategies to choose from. Day trading is a term used for short term investments. Day trading requires constant stock market observance so that a stock is bought and sold at prime times. Long term investments require a lot of research before sinking a lot of money into a company. Each investor also needs to know their limits and have an exit plan. If you do your research and make smart investment decisions penny stocks can return huge profits - even in a bad market.

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