Tips to Pick Penny Stocks Newsletters
Alongside huge risk in penny stocks, the stock chosen wisely they also have potential to give huge returns to investor. Sometimes, the returns can be so massive that it can double or triple the investment in just a matter of few months.
The most important aspect in this is how to choose that profitable stock. On an average only one out of 100 penny stocks become a gem and rest just a nightmare for an investor.
An important source of material for analyzing penny stocks is the newsletter. But the same must be an authentic. Here are few tips to pick the best newsletter. These are as below:
Previous years Performance: The newsletter should provide their past performance chart, indicating all the hits and misses with details like date of date of recommendation, recommended price with target and the result achievement. An investor must analyze its authenticity before evaluating.
Reasons for choosing the stock: The newsletter instead of showing only the numbers but also the information that demonstrated their stock pick to be worthy of passing it to their members. Not only the profit and loss figure also information on important determinants need to be mentioned like Business, Promoters financials etc.
No Vested Interest: It must be analyzed carefully that the newsletter owner or moderator must not have any vested interest into their stock tips. Penny stocks often are prone to pump and dumb schemes wherein these stocks are artificially brought into limelight of small investors for ultimately dumping the same at much higher levels.
Tips to Pick Penny Stocks Newsletter (Part 2)
These are as below:
Monitoring the Portfolio: This is a very import aspect, wherein an investor wants that his portfolio must get monitored constantly. The newsletter must be efficient enough to back up the buying of an investor by constantly monitoring the stock price and advise accordingly. It is as important to know when to sell the stock as to know when to buy.
Details on Subscription: The newsletter must let know the subscriber about details of subscription like they should tell how many picks they can expect to get over their subscription period and also about the timings of the same. It is important to know it as investor must be prepared for his investment.
Customization: The newsletter must have a customization aspect. Subscriber must see that the newsletter should have information and efficient enough guide to all types of investors. It is also to know whether they have a customer support as penny stock movement is very precarious as investor need advices from time to time.
Information on Brokers: Alongside guiding for stocks, newsletters should also give information on brokers. A choice of a right broker is also very important as that of choosing the right stock. Most of the investors do not have much start up investment and the newsletter guides in picking the right broker who provide low cost per trade and also gives fair trade to his client.
Information on Buying Order: The newsletter should also guide about placing the order of the investor. They should guide him regarding the limit and market order. The penny stocks are too volatile and low traded stocks, lack of information and cautious on placing the order may end up investor to buy at premium and sell the same at a discount.you can read Tips to Pick Penny Stocks Newsletter part 1 by clicking here
Penny stocks are the low-priced stocks having a share value of less than $1. The beginner investors undertake these stocks as the bulk stocks which could be purchased at low prices. The extremely low prices of the stocks allow the investors to hold thousands of shares with a lower amount of investment. The gain of a few cents per share can even result in higher returns in terms of percentage. Also, the losses can also be higher with the lowering down of the prices of stocks. Penny stocks are highly speculative and are considered to be highly risky for the lower liquidity levels and a small market capitalization of the associated companies. We also recommend checking out our free training.
SEC (Securities and Exchange Commission) defines penny stocks as a stock of the micro-cap company trading lesser than $5 per share. There is a chance that the company is new and requires market share or it might be close to bankruptcy. These stocks are dissimilar to blue-chip stocks and are not traded on the major market exchanges. The stocks less than $1 are delisted by Nasdaq rule. The people interested in trading penny stocks move towards OTC market groups for trading.