Beware the Professional Penny Stock Broker
These days there is really no rationale for hiring a professional full service stock broker to buy penny stocks on your behalf. Once you retain a typical stock broker to manage penny stocks for you, you are buying into exorbitant commission charges, often incompetent business services, and at worst, occasional scam artists.
Obtaining reliable investment information on the penny stock market is extremely difficult because of the scarcity of dependable corporate data in the treacherous world of the OTC and pink sheets. By the time a professional stockbroker were able to pass along important news about a penny stock, it would probably be too late to capitalize on it. Generally speaking, if the broker is strongly promoting a specific penny stock issue, he stands to benefit financially under the table, one way or another. The responsibilities of a stock broker do not mesh with the qualities of a good financial advisor. The broker is compensated for the amount of dollar volume he generates via stock sales. He is interested in generating high commission sales, not providing quality financial planning advice. He is naturally going to be interested in generating the quick buck via high commission sales, not working towards establishing a long term client relationship. On top of that, you end up paying triple the charges for receiving poor investment advice.
Stay clear of these charlatans and hook up with a reputable online penny stock broker. Generally speaking, you will not be communicating with anyone from the brokerage, unless there is an administrative question regarding an order. You will not be pestered by any salesmen looking to make a quick buck, leaving you free to perform independent investment analysis and place orders at your own discretion. You will be able to focus on the data that actually causes stock movements, such as the real time price of the issues and the commonly used pertinent mathematical ratios.
If discussing your finances with a professional is important to your peace of mind, then seek out a financial planner who charges a fixed fee for his services, and who does not have a vested interest in the actual stock transactions. The wave of the future for penny stock investing is strictly through the internet.
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Buying Penny Stocks – Investing In Penny Stocks
Investing in penny stocks is considered very risky and is not suitable for some one with a low tolerance level for investment risks. Also, most importantly, anyone who is interested in buying penny stocks should do a lot of really good research in choosing the right company to invest to.
As with other high-risk investment vehicle, penny stocks offer high leverage for the investors. A small amount of increase of the price of the stock can make a good amount of money for the investor. It is also very important for the investor to be willing to sit on the stock for a long period and view this investment as a long term gain.
Penny stocks are any stock that trades below $1 per share or sometimes below $5 per share. The shares generally fluctuate in value. Therefore, it is important the understand the movement of its price not only by using technical analysis but also by using fundamental understanding of the company’s assets, growth, and direction.
I would recommend that someone interested in investing in penny stocks would ask assistance from investment advisers. A good way to do it is to subscribe to investment newsletters offering investment advice. Be cautious though in choosing the newsletter that you would subscribe to. If you are on the lookout of a good investment newsletter here are some tips for you:
1. The company offers 24/7 customer service
2. The customer service representatives are friendly, courteous, and professional
3. The editors answers your inquiry either by mail, email, or fax (most editors won’t answer your questions via phone because they are constantly looking for good stocks to recommend)
4. they have good winners to losers ratio in their portfolio (6 winners out of 8 open positions is really hot)
5. And the company provides you access to the company’s model portfolio when you ask for it.
There are so many investment newsletters out there, but if you want excellence, you may want to consider the tips above.
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