Nov 12, 2011

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Making Money In Penny Stocks

Making Money in Penny Stocks is Simple and Affordable

Making Money in Penny StocksA lot of people have heard about penny stocks, but not many people know how to go about making money in penny stocks. It’s no secret that one thing that separates the upper-class from the lower-classes is their investments. They make money work for them, and while most upper-class investors focus on big companies, it is possible to get your foot in the door with penny stocks. They’re simple and affordable for just about anyone to invest in, and their volatility can make for some great pay-offs.

The First Step to Making Money In Penny Stocks

Before you drop all of your money into the stocks, take some time and watch the market. Learn about a few companies and be really choosy with which stocks you go for. Only invest in companies you believe in, not what the “top stock picks” suggest. Investing in companies you believe in is the one of the few ways you can protect yourself from a bad investment. If it a business model doesn’t make sense to you, why should you support it with your money?

Once you’ve made your picks, visit with a local stock broker. Ideally you will want to put in around $500-1,000 for your first investment. Make sure you spread it around as well, while the pay-off on one stock hitting it big with all your money sounds great, odds are it is very unlikely to happen.

The Second Step to Making Money in Penny Stocks

Once you have invested you will want to watch your money like a hawk. The strategy in Penny stocks is to get in, and get out in as little time as possible. Once your investment clears the fees you’ll pay for selling it, hold it for a little bit extra and sell it. After that you rinse and repeat the process until you have a sizable nest egg built up. From there you can invest in some long-term stocks and start the process over.

By working in this sort of way, you will protect your gains and end up making some great money in the long-term. While making money in penny stocks seems like a fun, exciting process for investing, it requires a lot of research and work, and there is a sizable amount of risk involved. For most investors that are interested in making money in penny stocks, it makes much more sense to cash out every now and then.

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