Penny Stock Trading Myths
There are a lot of truths and falsehoods that seem to surround things that people do not understand. That goes for stock trading in penny stocks. First we have to understand the definition of a penny stock. A penny stock is not necessarily a “penny’ although it could be. Let me explain, when you ask some investors what a stock penny is they can say anything from 5.00 dollars and under. Other investment professionals it is anything under 1 dollar. No, matter what your dollar cut off is for penny stocks, the main reason people avoid them is because they are a lot riskier than establish companies. For this reason, there are people, that will never, look at them, others that will look invest and move on, and others who will look, invest, explore and make a million dollars. It’s all dependent on the individual and what their risk tolerance is. But, let’s take a look at the top three common misconceptions about penny stocks.
The 3 most common myths are:
1. Penny stocks will make you a millionaire
The misconception that anyone who invests into penny stocks will be a million over night is not particularly accurate. There have been stories of people who traded in the right company and did become a millionaire in a company. This does not happen terribly often. Just like any other investment when you are trading penny stocks you are going to want to research your investment. Look at the company’s financials. Check with analyst if available and due your diligence in knowing about the company. This will help you increase your returns and receive better trades in companies that you know.
2. Stressful, Time Consuming, Little Return
I think that any stock you trade in the market can be one of these or the other. It is how you manage your time whether or not you are going to be successful in trading, in any stocks. Only trade stocks for a maximum of 2-3 hours, never longer. This includes research, analytics, price movements; etc it is always tomorrow to try again. But, like anything if you keep at it too long it will only make you frustrated. As you learn new techniques, and begin to become familiar with how things work in the stock market you are researching, it will become easier to manage your time effectively. The initial learning curve is always the hardest.
3. Savings is better than investment
When you are saving the current average growth of that savings, is roughly 1.2 percent on the dollar. Even if you invest in regular stocks and not the riskier penny stocks your average growth rate would be much higher than 1.2 percent. So, isn’t it worth letting your money work for you over you working for your money?
- What Are Penny Stocks? An Easy To Understand Explanation
People have many definitions of what a penny stock is. With all these definitions it can be confusing if you are trying to get in the market. Here, is a clear and concise informatin about what a penny stock is and how they work
- Penny Stock Trading Perspectives
Searching for a profitable penny stock is a challangeing perspective. Here are some things when you trade in penny stocks that you need to keep in mind so that your pennys will start to add up
- Penny Stock Investment Strategies
Penny stocks are the underworld of stock trading. They can be addicting, fun, and also dangerous. Having the right investing strategy will help you know what to look for in penny stocks. Here is a list of the top penny stock strategies you should con
More by this Author
Chile is full of tradition, history, and culture that make it one of the most interesting countries on earth. Here, are some of the top fun and interesting facts about chile
How to build the perfect dog house for your family friend. With all the comforts of home while he is out side to enjoy a new peaceful place your dog can call home
Nicaragua is the land of traditions, history and culture that cannot be found anywhere else in the world. Lets take a look at some of the fun and interesting facts that make Nicaragua one of the best countries in the...
No comments yet.