Penny Stocks: How To Retire in The Philippines
How Trading Penny Stocks Can Help You Retire In The Philippines
It's a sight to you will never forget. As the plane dips down across the South China Sea, you see the first of a fraction of the Philippine's 7,107 islands. The vista gives most visitors a visual knock-out. Many compare the view from the sky as that of the Caribbean yet very few can imagine financing their retirement by trading penny stocks there as compared to the Philippines. Penny Stock Trading is a highly profitable way to support your cost of living lifestyle and retirement plans, especially if you plan on retiring in the Philippines.
I started trading penny stocks in 2002 looking to make what I had lost in the market after the dot.com bubble burst in 2001. When I first visited the Philippines in 2003, I knew it wouldn't be long before I moved there. I just needed a method to finance it since I was only 32 then. I just need someone to guide me in Penny Stocks. I started researching the company's and that took forever, even with a CPA background and a lick for finance. The I discovered people who would do it for you, for FREE! I started subscribing to penny stocks to watch, penny stocks to buy and every list I could find about the best penny stocks to buy. Recently I have been using AimHighProfits: Free Penny Stock Alerts as my most trusted penny stock alert newsletter.
With a tropical climate similar to Miami, silvery beaches similar to Jamaica, world-class diving and jungle journeys as well, the Philippines is a haven for both retirees and vacationers alike. First of all, it never gets cold. One other featured benefit for those considering retiring here which is unlike that of other destinations outside the U.S. is the language. There's no language barrier. The Philippines is the third largest English speaking country in the world. And outside the capital, Manila, most expat retirees live better than "comfortably" on $800 to $1,200 per month. A pittance of how much you can make trading penny stocks.
With the guidance i get from AimHighProfits Free Stock Alerts as well as other Penny Stock Picks from other free newsletters, affording to live in the Philippines is a breeze. In many places the monthly rent for two-bedroom apartments and bungalows is $200 to $300. In Olongapo, popular with retired U.S. servicemen, a 2,150-square-foot bungalow lists for $266 monthly. Private health care is inexpensive and the Philippines is a popular destination for medical tourism. Everywhere I visited had private hospitals or clinics-Manila has top-notch, state-of-the-art equipment.
And here's the clincher: The Philippines has a special retiree visa. If you're over 50 years old and have a monthly pension of $800, you can obtain permanent residency. Pensions and annuities are tax-exempt. And there are "retirement" options for the over-35's also. Dazzling white sands, Flowers everywhere, Low living costs and inexpensive inter-island flights, No need to learn a foreign language, Expat enclaves, all while managing your investments online and still getting up to the minute penny stock tips. You can even simply open bank accounts here to receive your fund transfers from your U.S. or any other worldwide account for easy access.
Granted, $800 to $1,200 won't fund an Imelda Marcos lifestyle, but it will fund a lot of treats including household help. In the provinces which have large expat retiree communities, the monthly salary for live-in maids is around $45. A haircut and shave in Dumaguete, a coastal town on Negros Island, cost me $0.27. Manicures and pedicures averaged $.80; an hour-long massage in a salon, $3.50. In Palawan Island, lunch for two was a whopping $4.86. San Miguel beer, The Budweiser of the Filipino, was $0.38. And at where I finally planted seeds to grow roots, Baloy Beach, an expat neighborhood in Olongapo on Subic Bay, you can get American-sized portions of bacon, eggs, hash browns and fresh bread, all for $1.94. Coffee included.
So you ask yourself: The Philippines as a retirement destination. Why not?
10 More Reasons To Retire In The Philippines
1. Easily obtainable Driver's License
2. Friendship and Companionship
3. Cheap utilities (Electric, Gas, Water)
4. Beaches, Beaches, Beaches
5. High Speed Internet
6. Easily accessible ATM and Banking
7. Foreign Food Products and Franchises
9. Shopping and Malls
10. Clean-Fresh Ocean Breeze
4 Methods For Selecting Penny Stocks
1. Use a Fundamental Stock Screener
Where do you find a list of penny stocks and cheap stocks to trade? Some investors will gravitate to message boards and forums, or just wander aimlessly from stock to stock without having a clear idea as to which company is a suitable pick. You can avoid this fate and find some of the best penny stock picks by using an automated screening device. Bing Finance is one fundamental stock screener that filters through companies not listed on major exchanges. Over The Counter (OTC) Markets is another screener that currently has around 10,000 securities listed, many of which are penny stocks. This number gives you an idea of how many companies you might miss if you focused only on the major North American stock exchanges.
Using a stock screener will help you filter stocks based on the following:
Book or intrinsic value
Growth, earnings, or revenue
Just keep in mind that some OTCBB exchanges have few requirements for companies to report income statements and other financial filings. Stocks with spotty reporting may not show up on your radar, but that could be a risk worth taking.
2. Make Use of Support and Resistance Levels on Charts
Many people cringe when technical analysis is brought up. They may feel that it is convoluted, complex, and subjective. This can be true of some technical analysis. If you are new to chart trading, stick to simple analysis techniques such as support and resistance levels.
Support Levels - When the shares fall down to a price and then bounce back up, it is called a support level. The more often this happens at a specific price level, the stronger the psychological support becomes.
Resistance Levels - When prices go up only so far before falling back down, the peak price becomes a roof that creates fear. This is known as resistance.
A simple technique is to look at a 6 month price chart using daily data. Draw a horizontal line underneath and above prices that the penny stock bounced off of. Consider buying on support and selling before resistance.
3. Look at Liquidity
Some penny stocks will only trade a few hundred shares a day while others will trade hundreds of thousands or more. To get an idea of how liquid a company is, multiply the amount of shares by the price to see how much money flows through the company each day. Penny stocks on major exchanges will generally have higher liquidity than Pink Sheets or other Over The Counter Bulletin Board trading. Highly illiquid stocks with only hundreds or a few thousand dollars traded per day can experience extreme volatility. It is difficult to invest a few thousand dollars in such small companies without driving the prices up. Also, when it comes time to sell, prices may plummet since there are few immediate buyers. Ensure your stock has enough liquidity for a fair, average price. Consider using limit orders, which set an overhead ceiling on maximum share price. Limit orders on illiquid stocks may take many days to fill, but the savings are worth it.
4. Don't Look for Penny Stocks that are Jumping on High Volume
Is more liquidity always better? When a stock goes up 50% on high volume, is this a great buy? Probably not. Here's why:
A study by Charles M. C. Lee and Bhaskaran Swaminathan titled, Price Momentum and Trading Volume highlights the link between winning stocks and volume. Consider some of their findings:
Stocks with decreasing volume are more likely to rebound in price
Stocks with a massive surge of volume are more likely to correct in price
The worst performing stocks were ones that jumped in price on very high volume. This seems highly counter-intuitive, but you should reach your own conclusion only after reading the paper. Based on their study, some simple techniques can be employed:
Buy penny stocks that previously went high in price on high volume, but are now trading at decreased volume levels
Buy penny stocks trading down in price toward support levels on decreasing volume which indicate selling is drying up
There are a few other places to look for some bargain investments that may or may not be penny stocks. There are some great sites online that you can use to find the best value stocks:
52 Week Low List
Momentum investors chase after stocks on the 52 week high list. Value investors do the exact opposite. If you want to find cheap stocks, you should scour the 52 week low list. This is one of my favorite places to look for potential buys. Check out sites like Google Finance and Bloomberg for investments that have recently hit their lows for the year. You can get some real value from off of this list. Be careful though because you need to be able to distinguish between a "dog" stock and a stock that has dropped unfairly. You can't just choose any name on this list; you need to find the ones where nothing drastic has changed about the company's underlying fundamentals yet the stock price has dropped significantly.
Stocks normally see a huge spike in price and volume when they receive an analyst upgrade. Stocks that receive analyst downgrades have the exact opposite reaction. Institutional investors and individual investors unload shares that are no longer rated a "buy" by rating agencies and equity analysts. Look for analyst downgrades on sites like Yahoo Finance and CNBC. Wait a few days after the downgrade and then pounce. You can find quality companies selling cheaply just because a stock has fallen out of favor with an analyst.
Money Flows Buying On Weakness
The Wall Street Journal's Money Flows Buying On Weakness chart is a list of stocks that have dropped and seen the largest inflows of money. This list is updated every 15 minutes and shows you exactly how much money is coming into a stock versus the money going out. This is a great tool for helping you evaluate which beaten down stocks investors feel the strongest about.
P/E Ratio Laggards List
If you want to find the cheapest company in a sector, search through their P/E ratios. It can be time consuming to check every company's P/E ratio. That's where the P/E Laggards list comes into play. This list is a good place to start. The P/E laggards list will rank companies from the lowest P/E to the highest. Companies with low P/E ratios and solid growth rates may be great investment opportunities that the market is discounting. Be careful when it comes to P/E ratios. P/E ratios are very industry specific and shouldn't be used as the sole valuation tool. And if you are intent on using ratios, there are other important multiples to consider such as Enterprise Value/EBITDA, Enterprise Value/Revenue, and Price/Free Cash Flow.
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