How long should you be invested in a penny stock?
The time spent invested in a penny stock depends on the volume of the stock being traded. You should be weary when investing in penny stocks because a stock with no volume has little market value. Volume dictates liquidity of the stock, and that liquidity is needed to sell the stock. As it's been posted on previous posts, if you invest in a penny stock, make sure you invest in a penny stock that is building equity value or buying assets to back its market price.
What should you do if the price goes down?
If the price goes down, don't sell. You can set sell orders for a maximum of about 30 days if you're with a discount brokerage. Place a sell order for a price higher than your purchase price. If you believe the stock will have long-term value, then it is a good time to buy more.
What are your options for minimizing loss?
Setting sell order every time the purchase price doubles initially gets the principal out and leaves potential for growing the asset. Doing this protects the principal and allows you entry into another stock. Don't put your eggs in one basket. Invest in several different penny stocks. Penny stocks are risky, but when one hits, the returns are huge.
What exit strategies can you use to minimize loss?
This game of investing has no set rules to negate chances of loss. However, exit strategies will help minimize losses. Before entering the market and buying the stock, create a plan. Think of what returns you want to make before selling shares, how long you want to be in that stock, and if and when you will need liquidity or cash. Penny stocks are risky, but if you are prepared to play, you can rationally control your position.
The time spent invested in a penny stock depends on the volume of the stock being traded. You should be weary when investing in penny stocks because a stock with no volume has little market value. Volume dictates liquidity of the stock, and that liquidity is needed to sell the stock. As it's been posted on previous posts, if you invest in a penny stock, make sure you invest in a penny stock that is building equity value or buying assets to back its market price.
What should you do if the price goes down?
If the price goes down, don't sell. You can set sell orders for a maximum of about 30 days if you're with a discount brokerage. Place a sell order for a price higher than your purchase price. If you believe the stock will have long-term value, then it is a good time to buy more.
What are your options for minimizing loss?
Setting sell order every time the purchase price doubles initially gets the principal out and leaves potential for growing the asset. Doing this protects the principal and allows you entry into another stock. Don't put your eggs in one basket. Invest in several different penny stocks. Penny stocks are risky, but when one hits, the returns are huge.
What exit strategies can you use to minimize loss?
This game of investing has no set rules to negate chances of loss. However, exit strategies will help minimize losses. Before entering the market and buying the stock, create a plan. Think of what returns you want to make before selling shares, how long you want to be in that stock, and if and when you will need liquidity or cash. Penny stocks are risky, but if you are prepared to play, you can rationally control your position.
1st rule: Knowledge and information
This game is ruled by knowledge and information. The more you know about the stock, the better your chances of survival in the stock game. A movie in the '80s called Wall Street starring Michael Douglas illustrated the importance of information, although his methods of corporate espionage were illegal. Another movie filmed in 2000 called Boiler Room where a group of "stock brokers" sold illegal securites over telephone to unsuspecting investors who had no informaton about the stocks. Both stories are a testament to the importance of correct and accurate information.
2nd rule: Protect your principal
Get your principal in then out as quickly as possible. Robert Kiyosaki, as well as many other financial authors speaks about this all the time. Buy assets and let them grow. As illustrated above, if you pull out your principal, you'll have both cash and an asset to get in on the next opportunity.
3nd rule: Don't get greedy
This game is ruled by knowledge and information. The more you know about the stock, the better your chances of survival in the stock game. A movie in the '80s called Wall Street starring Michael Douglas illustrated the importance of information, although his methods of corporate espionage were illegal. Another movie filmed in 2000 called Boiler Room where a group of "stock brokers" sold illegal securites over telephone to unsuspecting investors who had no informaton about the stocks. Both stories are a testament to the importance of correct and accurate information.
2nd rule: Protect your principal
Get your principal in then out as quickly as possible. Robert Kiyosaki, as well as many other financial authors speaks about this all the time. Buy assets and let them grow. As illustrated above, if you pull out your principal, you'll have both cash and an asset to get in on the next opportunity.
3nd rule: Don't get greedy
It's very easy to get caught up in gains and growth, but remember there is a downside. Losses coming from greed. As an investor you want to make gains, not take losses so make the gains and get out. You'll be surprised how fast little gains add up. Besides, it's better than being in the negatives.
For some interesting new stocks, I found this site that has recently been marketing CEO's of young OTC.BB companies... www.emergingissuer.com.
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