HOT PENNY STOCKS -
TIME FOR A PAUSE!
Let's pause for a moment and reflect on
why anyone would want to go around circulating these rumors or peddling
'hot penny stocks' over the 'phone. It just doesn't tally with human
nature nor with the way in which power operates in the real world. Just
think about it: isn't it far more likely that a small number of
self-interested individuals are intent on dumping over-the-counter
stocks onto you? Why, if they had genuine information on a hot penny
stock about to take off, would they want to share it with you?
It's perhaps a truism to say that knowledge = power = money, but in the
real world it's also true that individuals who wield the most influence
and power, and incidentally tend to make the most money, operate quietly
behind the scenes. That's not to say that these background figures, who
buy and sell stocks over the counter, necessarily operate “under the
counter”. Nor is it true that there's no such thing as a good,
informative penny stock newsletter. However, it does mean that, when
being harangued by a zealous telemarketer to part with your money, you
can be sure that a sinking company and a few unscrupulous individuals
are lurking in the background.
Perhaps, though, you see two a penny stocks as providing a real
opportunity to get in at the bottom and then make a big killing?
Perhaps, when a stock has dropped, you might think that the only way to
go is up? Don't get fooled, though, into buying “bargain” stocks solely
because they cost less than before. They could continue to sink without
trace. As children we must have been extraordinarily prescient when we
added an extra line to the nursery rhyme and chanted the virtues of
four-a-penny bargains: “If you haven't got a halfpenny, a farthing will
do”. It won't do, though, if you're buying hot penny stocks. Don't ever
feel pressured into buying a "bargain" that will almost certainly end up
virtually worthless.
If you still think that you're acting rationally in buying hot penny
stocks then you're behaving exactly as our 21st. century streetsellers
would wish. But, remember, you're not a consumer buying hot cross buns:
you're an investor aiming to make money by buying and selling hot penny
stocks. Buying two-a-penny hot cross buns might make some sense, but
two-a-penny hot penny stocks can mean buying, but not selling, for the
price you want.
Not only selling but buying, too, becomes difficult when stocks are
being traded at very low volumes but, at the same time, are being
flagged up as the next hot penny stocks tip. A consistently high volume
of traded stocks is absolutely essential, preferably on a daily basis.
Average figures might seem good enough, but can often mask one insider's
buying and selling activities. Lack of trading opportunities precludes
any chance you might have of becoming a rational, educated trader as you
will not develop a "feel" for where the stock is heading.
Learning how to become a rational, educated investor takes time. There's
no easy shortcut to the undoubted profits which exist in the market.
Those individuals who want to reduce the risk of their hot penny stocks
investment must be proactive and subscribe to a newsletter, research
companies, and track investments.
Only when they feel comfortable, and have set themselves a limit of 20%
of their portfolio to invest in hot penny stocks, should they prepare to
do quiet battle with the market and silence the two-a-penny hot cross
bun merchants.
About the Author:
Maureen Cook gives you a clear understanding of Hot Penny Stocks. She
signposts the beguiling words of the tipsters, and the dangers inherent
in trading penny stocks. To find out more, visit:
http://www.penny-stocks.myknowledgevault.com
Source: www.isnare.com
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