Investment Guide to Investing For Beginners By James Leitz

You need the best investment guide you can find in this messed up economy and tough investment environment. You'll also need a good guide to investing for beginners to navigate the rough waters ahead. Investing has never been more difficult or confusing. It's time to learn how to invest, and here's how to go about it.

First, you'll need to get a handle on the investment universe including any investments you might already own. This is not that difficult if you have a good investment guide, since there are only 4 basic investment alternatives out there. Second, you'll need to learn how to invest and put together a sound investment strategy that will work for you in both good times and bad. That's what a good guide to investing for beginners can do for you.

In other words, learning how to invest successfully over the long term is a two step process. Skip step number one and you won't understand step two. Without step two you won't be able to put the investment knowledge you learned in step one into action. Up front I stated that now is a tough time to invest. Now I'll back that up with my 35 years of investing experience, in terms of the 4 basic investment alternatives available to all investors. Consider this a mini investment guide and a wake up call. Investing for beginners is no picnic today.

Your 4 basic investment alternatives in order of safest to riskiest: safe investments, bonds, stocks, and alternative investments. Safe investments like bank accounts and money funds pay interest, and these days they don't pay much. The score in late summer 2010: 1-yr. CDs at less than 1% and money funds at less than.05%, or one-twentieth of 1%. This is not normal, and is in fact downright scary. The government can hardly push rates lower to stimulate the economy as they've done in past years. We are already looking at zero interest rates in the money markets.

In order to earn higher interest income of 3% or more, average investors are moving money into bonds in the form of bond funds, which are not really safe investments. Simply put, when interest rates go UP, the value of bonds go DOWN. That's a basic investment fact you can count on - interest rate risk. If you believe that interest rates will fluctuate as they always have and will go up in the not-too-distant future, bonds are not exactly great investment alternatives at this time. With two down and two to go, we move into the riskier choices that involve assuming the risk of ownership in order to earn higher returns.

Any guide to investing for beginners can point out that on average, over the long term, stocks have returned about 10% a year. The problem is that over the past 10 years the average investor would have done better with his or her money in safe investments in the bank. And over the past 3 years, a loss of about 10% a year was common for the stock funds that invest money for millions of average investors. Investor confidence in the economy and the stock market is not high, as billions of dollars are being pulled out of stock funds and moved someplace else (like to bond and money funds) in search of greater safety.

In the past when uncertainty was high and confidence in the stock market was low, smart investors turned to other (alternative) investments like real estate to find opportunity. That's been a problem this time around, because the financial system seems unable to get the traction needed get things moving again. High unemployment won't go away and millions of mortgages are "under water", as people decide to just walk away from their financial obligations. Gold and silver have done well compared to other investment alternatives. If history is any guide to investing, that's not exactly a cheerful note. People buy and hoard gold in times of fear and desperation.

Out of our 4 basic choices, none looks like a screaming BUY opportunity. Some of the best minds in the investment world are suggesting that investors need to start viewing the investing game differently and lower their expectations. I suggest that you start with the basics and curl up with a good investment guide on a rainy day. Then, you'll want to follow up and learn how to invest with a guide to investing written for beginners. Once you start to get up to speed you might even begin to enjoy the challenge. And make no mistake about it... investing today is a challenge.

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Hot Stock

The Best Way to Find Hot Stocks

hot stock picks
The Best Way to Find Hot Stocks is to do some research. The Best Place to research stocks for initial discovery is through Research Reports, Newsletters, Magazines, and investment blogs.
There are many good sources to discover stocks: Investors Digest, the Money Letter, The Money Reporter, the Zweig Forecast, The Economist, Wall Street Journal, etc.

The newest method to find great stocks to invest in is to search blogs. Google Search: Investment Advice Blogs — and you will find a number of great blogs listing hot stocks and good opinions about the stock market in general.

Another place to look for stocks to invest in is through Annual Reports and Broker’s Packages.
Hot Stock Buys

Picking stocks can be a daunting experience. How do you know which ones are the hot stock buys and which ones are the poor performers? There now exists computer software programs that can literally analyze a broad spectrum of the stock market for you and make “hot stock buy” recommendations. Capable of processing millions of computations per second along millions of data points for several thousands of stocks, these computer programs can analyze trends and patterns, and make extrapolations on future performance of each stock with unparalleled mathematical precision.

Can you blindly trust a computer to issue you “hot stock buy” alerts? Nobody, not a human nor a computer, can predict the future. Any financial advisor will advisor will ask you to “do your homework” before investing stocks.

Find Your Own Hot Stock Picks – Without Cramer!
Jim Cramer’s stock picks have become world-renowned and world-reviled-depending upon who you talk to-as CNBC’s “Mad Money” TV show has grown in popularity.
IBD ranks its top 100 stocks according to a variety of criteria, the most important of which are earnings and relative price strength readings.

No strong earnings, no stock pick. Earnings and especially a track record for earnings growth is what powers stocks higher. A ranking of 80 in either of these categories means a stock is performing better than 80% of all other listed stocks. A stock pick’s “Accumulation” ranking tells you whether the institutions that drive stocks higher are onboard your stock or passing it by.

Want to get really good at picking stocks? Start finding those stocks that are forming one of a small handful of stock charts that a stock forms just before making an explosive more.

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Invest in Stocks

How To Invest In Stocks

So you are looking and past performance and expected future performance. The past performance will not always reflect the future performance of a stock.

Past Performance
The past performance of a stock is based on the price to earnings ratio or commonly known as the PE ratio of a stock. Some companies have no dividend and hence only rely on capitol growth for their investors. The dividend is the money per stock held that is released as profit to the owners of the stock. The dividend is the share of profits that the company made in the time frame allocated to the financial year. For example, if the company has made an $8.00 profit per share in one financial year, it may release $2.00 of that profit each quarter. Different companies will release profits in different ways. Examine each company for the methods of profit share.

What Effects Future Performance
Economic issues can affect a company’s performance because they influence the returns through monitory exchange rates, borrowing power, labor and capitol input considerations. These influences do not have an immediate impact on the company’s performance, but should be evaluated over the longer term, for future performance expectations.
Internal factors such as leadership issues, policy direction and financial planning for future growth will all indicate to the investor the likely future performance of a company. Changes in policy direction can have a major influence on future performance in a company. With higher debt levels come reduced returns.

Invest in Stocks – Strategy
Before investing your money in stocks, you must plan out your investment strategy based on the amount of money you want to invest. Keep the following points in mind before actually making your investments in stocks.

Maintain a diversified portfolio
Most stocks can be classified as high-risk, medium-risk and low-risk investments. The rate of returns is the highest on the high-risk stocks and the lowest on the low-risk ones.
When to buy and sell Stocks
Study the market and analyze whether it is the ideal time to buy or sell a stock. Study the stock price movement charts to time your buying or selling and then decide if it is wise to change your investment strategy.

Decide the time period for your investments
If you are a medium risk-taker, you should invest in growth stocks and aim at a medium term period ranging from one year to three years. To reap maximum profits, invest in turnaround stocks and aim at short-term periods of about one year. These stocks involve a very aggressive investment strategy. Before buying the stock, go bargain hunting for the best price.

Select the right company
Keep in mind that all companies listed in the stock market may not be uniformly good. Chances are that undervalued stock will result in maximum growth in your portfolio. Also study the out of favor companies in the market for they may be selling their stock at a deep discount.

Decide on the right price of the stock
If the returns are attractive and growing, then the high price of the stock may be justified.


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Growth Stocks

Major Stock Picking Strategies

growth stock
Efficient stock picking strategies are important for an investor in order to grow his/her personal wealth significantly. An investors stock picking strategies depend upon several factors including the performance of companies, market and industry trends, and share prices.

Growth Investing
Through growth investing strategy, investors focus on rapidly growing companies, which are witnessing significant increase in revenues and profits. Normally, returns from growth stocks are substantially higher than that of other type of stocks. Growth investors pick young and fast-growing companies, despite the expensiveness of these stocks, as the investors bet on the future growth potential of the companies.

Value Investing
Value investing is opposed to growth investing. Value investors focus on stocks, which are trading below their intrinsic values. Value investors look into the fundamentals of the companies carefully and they believe that the market undervalues these stocks. Value investing does not mean that choosing a cheap stock, rather investing in undervalued stocks that have good growth potential.

GARP Investing
GARP (Growth At Reasonable Price) is a combination of value investing and growth investing strategies. Through GARP investing strategy, investors focus on stocks that are reasonably priced, at the same time possess robust growth potential.

Fundamental Analysis
Fundamental analysis is a stock picking strategy through which an investor or analyst tries to estimate the intrinsic value of a stock based on fundamentals.
Technical Analysis
Technical analysis, also called chart analysis, is an investing strategy through which investors gauge the future price movement of a stock through past performance.

Value Stocks Vs Growth Stocks – Which Are Better For Your Portfolio?
Its a very common question among individual investors, which is the better bet: value stocks, or growth stocks?

If you are 25 years old and looking for 15% returns annually for a number of years, you will need to go heavier on growth stocks. If you are 65 years old and looking for a little extra income for when you are 75 years old, you will likely be looking to deep value stocks.

Ideally, you really should have some amount of growth stocks and some amount of value stocks in your portfolio to diversify. Diversify means like about 60% in growth names, and 40% in value names. If you are in too many growth names that are too volatile for you, maybe you need to add a classic value stock.

If you are in all value stocks and believe you aren’t getting the returns you need, go pickup a growth stock.


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Gold Coin Investing

Gold Coin Investing – The Story

Gold coin investing can be one of the brightest investing strategies during times when the economy is in a downturn. Gold coin investing is one way a person can hedge against rising inflation and lower stock prices. Gold coin investing is and excellent barrier from inflation and economic despair and have proven to be a worthwhile investment for people looking to profit.
Gold coin investing typically refers to investments in either bullion coins or certified rare coins.

The major difference between these two products is that bullion coins are more often used by investors who seek a short-term profit tool while certified rare coins are more often used by investors who seek a long-term preservation tool. First things first, bullion gold coin investing is typically used by short-term investors who seek profit from the precious metal market because bullion products hold low premiums above the spot price of gold, thus it’s easier for investors to enter and exit the market in a cinch when looking to maximize profit potential.

Another important factor to consider when looking into gold coin investing is the issue of bullion confiscation. Many precious metal investors fear bullion confiscation because it may be the only way that the United States Dollar could regain its notorious strength as the top fiat currency in the world. Wise investors who want to protect themselves from such a circumstance may want to consider certified rare coins that are deemed non-confiscatable by the United States Government.

You must choose between investing in older coins or the newer bullion coins, but either type of gold coin investing is a solid choice because of the large selection available and the lower premiums when compared to choosing gold bars. Gold coin investing is never highly recommended by investing experts to be the only investing strategy a person should employ.


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Equity Investment

The Role of Equity Investment in the Stock Market

Typically, the trade of purchasing and investing shares of stock in a stock market is called as equity investment. People owning such shares and stocks obtain investment gain as the rate of the stock mounts. Characteristically, the major finance management firms administer the mutual funds.

The cost of equity austerely depends on the supply and demand. The value increases in situations where the number of consumers increases against the suppliers. Ultimately, suppliers involved with the elevated trading price go into the market and attain stability among purchasers and suppliers.
Assessing a Losing Equity Investment and Unit Trust

First, identify the factors that cause the share’s poor performance. Given time, the market and good shares will always recover their value. If the market is healthy but your share’s price is still decline, consider the reasons for selecting the company in the first place. If you had invested in the company for a specific reason, check if that rationale continues to hold.
Hold on to losing shares only if you’re absolutely confident of the company’s potential.
Hanging on and hoping that the share price will return to your original purchase price level can significantly erode your capital.

Dividend Stocks

Why Should You Invest In Dividend Paying Stocks?

Stock dividend
I believe that creating a passive income stream through dividends is an achievable, intriguing and stimulating way to decrease ones dependency on salary income alone. Stocks on the other hand offer you the best possible investment opportunity out there. Over 30-35% of stocks performance over the past 50 years has been attributed to dividends; the rest comes from capital gains. A closer look at the S&P 500 from 1957- 2005 shows that dividends have grown on average of 5.3% per year for the index. With inflation assumed to be averaging around 3 – 4% per year, the investment in dividend paying stocks would have provided the investor with an income that keeps its purchasing power year over year, which unlike fixed income securities, can also provide them with capital gains.

Even during turbulent market conditions when most investors are fixated on their capital losses, incoming dividend payments would definitely soften their losses. During the 1966-1982 period when stock prices returned 1.45% on average per year due to high commodity prices, stagflation and high-unemployment, the average dividend yield in the S&P 500 was 4.2%.

There are amazing dividend paying companies such as Colgate Palmolive (NY:CL) (yield 2.0%) that have paid dividends every year since 1895 or Proctor & Gamble (NY:PG) (yield 1.9%) since 1891. These tremendous dividend histories confirm the companies’ commitment to paying dividends. Are the dividends sustainable ? (Check the dividend payout ratio). Are the dividends growing ? (Check the dividend growth rate). Even better, when dividend paying companies you own increase their dividend payouts, your income increases! How long has the company paid dividends ? (Check the dividend yield and history).

Dividend stocks give you both growth as well as income. Here are a few strong reasons as to why you should consider it:

1. They give out a good return
2. The dividends are lightly taxed. We are talking only 15% here. Compared to other options, that’s pretty significant.
3. You don’t have to do anything to get your dividend, they just send it to you. I like having to do less work.
4. You have a lot more control over them, the funds aren’t “trapped” like many other investments. This gives you a lot more flexibility over your investment.
5. Dividends can increase over time (unlike bonds). This can increase your earnings significantly.
6. Dividend yields can also increase over time. Again, this can compound your earnings significantly.
   

As you can see, the best dividend stocks have some unique features that other investments tend not to have.


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Discount Brokers

By Revy Anandya Azhary

Discount Stock Brokers
Discount brokers

Discount stock brokers are individuals offering services for a variety of trades at discounted prices. Their position permits them straight access to the share market. Discount stock brokers are ideal for those who know the trade industry well and do not need extensive information about the market. Since an investor can obtain high discounts, these brokering services are very significant.

Discount stock brokers do not provide any investment advice. Stock brokering is also pretty simple to do online. The online stockbrokers are mainly discount online stockbrokers and full-service online stockbrokers.

Discount online stock brokers – licensed to trade in shares – are popular with today’s online investors. Full-service online stockbrokers can provide far more stocks and products compared to discount brokers. A stockholder can work with multiple discount brokers at the same time.
Best Discount Brokers

Today, discount brokers are greatly preferred, as they offer virtually the same service as full-service brokers, at a rock-bottom price. TD Waterhouse, Ameritrade, and Questrade are some of the best discount brokers.

A good discount broker will not have any hidden fee such as postage or handling fee. Always choose a broker who charges minimum commission.

Most online discount brokers offer Direct Access Trading (DAT) facility to have instant access over the market. Certain factors have to be considered while searching for the best discount brokers. Check whether the brokers are properly licensed. Some brokers focus only on specific segments of trading. Reading stock forums also plays a significant role in choosing the best discount broker.


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Day Trade

Day Trading Advice

The stock market is an entity that just keeps changing. That, combined with the fact that human beings are creatures of habit, has resulting in a tendency for stock movement to follow habit. That’s why we can benefit from technical analysis when day trading.

The down side is that, like people, technical analysis isn’t necessarily completely reliable. There are always exceptions, and learning where they are can create the difference between a successful trade and a failed one.

For instance, a successful day trader should be able to stay neutral, maintain a business plan and journal of trades, and will focus on just a few techniques that work well for them.

Staying neutral means taking your wins and your losses calmly, no matter how big they are. The market must not be allowed to control your emotions. A business plan and a journal are also vital. Documentation and careful though go hand in hand. Focus is important if you’re looking for success, because it’ll help you be proficient at the techniques you choose. Add that focus to a skill with money, and your chances improve greatly. Day trading is a tough business, and being able to manage risk and money effectively will help you a lot.
How Can I Make Money Day Trading?

Trading commodities and stocks is a day job, and a challenging one at that. Time management is the first important habit. If you’re the type who can’t function before 11:00 a.m. or has to guzzle down multiple cups of coffee before facing the day, day trading may not be the job for you.
Though “gut” decisions can help you make (and lose!) money as a day trader, you’ll need to be able to make informed choices from reading, perusing, and comprehending numbers very quickly. You can learn certain quantitative skills, even if you were never that great at math. A third habit that breeds success for day traders is patience and the ability to make keen observations. These habits must be combined with an excellent short-term memory. Also be sure to keep your cool when you score a winning trade.

The fourth habit you’ll need to cultivate is research skills. Day trading, thankfully, does not require the same kind of in-depth numerical analysis as long-term investments, but you’ll need a handle on the flow of information so that you can use this knowledge base when making quick judgments. High ranking day traders use a variety of tools and have different research and data services at the ready.

Realize ahead of time that it’s hard work, and will require savvy, dedication, and focus.
If you think your skills are a good fit for day trading, this can be an incredible way to earn great money.

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Contrarian

Contrarian Investing – The Only Way to Build Wealth

The contrarian
A contrarian investor is someone that prefers to do the opposite of what everyone else is doing. In the 1990’s when other investors were buying the high-flying technology stocks contrarian investors stayed away from them. After these stocks crashed, contrarian investors waited in the wings and then bought up shares in companies like Xerox. Contrarian investors also love it when the media talks bad about a well-known company. I personally agree with some aspects of the contrarian investors mind. A contrarian investor has much more discipline and patience than an average investor who is just following the crowd.

While this particular type of trading is incredibly risky it can also provide astonishing payoffs to savvy investors. If you wish to be successful when it comes to contrarian investing you must first learn to think well outside the box. One important thing to keep in mind with this particular sort of investment strategy is that it is a high-risk type of investment. It is also a good time to consider buying when most people are bailing, wailing, and gnashing teeth at their brokers.

To me, contrarian investing isn’t just about buying stocks when people are selling and selling stocks that people are buying. To me, contrarian investing is about identifying opportunities that 99% of other investors haven’t. If you’re wondering what makes McDonalds fries taste so good, it’s the beef flavoring they use. By digging down the rabbit hole of the food industry you discover interesting things about the foods you consume. And digging down the rabbit hole of investing is the ONLY way to build wealth.


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Buy Stocks Online

Getting Into Buying Stocks Online

Buying stocks online
Well if you have ever thought about or considered getting into buying stocks or learning how to buy stocks through the stock market there has never been a better and easier time then now.

So before you learn how buying stocks works in the Internet world there is a few things that you should think about and do. Remember after you do decide to start working with an online trading company you will usually need to fill out some basic forms as an application and once they are approved you can start trading, selling, and buying stocks.

If you are just starting out in stock investing then I would really recommend that you try and find a mentor or teacher. This person might even be an uncle or father who can teach you the ropes of online stock investing.
If you can’t find yourself a mentor or someone to work with and teach you about good stocks to buy then I would really do lots of reading and online research first.

How to Buy Stocks Online
If you talk about stock trading system, Internet stock trading is one of the easiest options one can opt for investing money online.
Buying stocks online has become fairly straightforward. To buy stocks online, you need to open an account with your preferred online brokerage firm. When you log into your account, you can buy stocks online. Buying online stocks is quite easy once you have decided to buy a particular company stocks and have a brokerage account with you.

Following are some of the important steps and points that need to be followed for online investment:

• Buying online stocks is quite easy once you have decided to buy a particular company stocks and have a brokerage account with you.
• Get yourself informed fully before purchasing online stocks.
• Check out the things that you need in a brokerage account. Do you need to meet with someone in person or a telephone conversation is enough? Do you want to buy stocks or also sell stocks?
• Stockbrokers can provide platform for you to buy stocks in the market. Therefore, you need to contact online brokers. Choose online brokers who charge minimum commission for their services.
• Contact firms or online brokers and request an application. Fill out the form and open your account. Once your account gets activated, begin buying and selling stocks online.
  

Keeping all these things in mind, you can look forward into online stock trading business. Stock market investing comes with risk, but there is no success without risk. Gather information, discuss with friends and relatives who are into online stock trading or consult financial adviser regarding your online investment plan and invest accordingly.


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Buy Shares

By Revy Anandya Azhary

How to Buy Shares – A Complete Beginner’s Guide
Picking stocks is a lot like buying a car. It’s no different when you pick stocks.

The first thing you need before you buy shares in a company is a stock trading account. If it’s your first time, I recommend using a discount broker. This type of broker will process your buy and sell orders, and little else. Chances are if you have an account there they can help you start a share trading account easily and at a low cost.

For your first purchase, you want to buy what you know. Look at 3 companies that you like – companies you have bought things from or know people at. Pick up a newspaper and write these four things down:

• Price- If the shares are $500 a piece, you might want to skip this one for now.
• Year’s Move (YM) - This is how much the share grew in value last year, and a fairly good indication of what the company will try to beat this year.
• Dividend Yield (DY) - This is a percentage of the value of each share that the company pays to shareholders each year. Some shares don’t pay dividends, but make up for it with more growth
• Price/Earnings (PE) - This is simply the price of the share divided by how much the company made in this financial year. Basically a low Price/Earnings ratio means that the company’s stock is valued about right for how much money the company is making.
  

If the ratio is high it means that the company has a lot of projected growth, but little actual profits so far. Go to the company’s website, and click on “Investor Relations”. Picking stocks is about more than knowing the company. Now your buy case: This is an argument for and against buying the shares. What’s happening in the world that could affect the company’s ability to make money

Lastly, before you buy shares, ask people. Ask someone who works for the company or ask an investment advisor, even if you have to pay them. Remember, buying shares is not gambling if you know the rules.

Stocks and Shares – Tips For Investing Wisely

Even with the present difficulties in the stock market, buying stocks and shares remains one of the most profitable ways for private individuals to invest their money. If a share buyer is to have a chance of avoiding such bad investments, a number of factors must be considered before purchase.

The first is to determine why the shares in question are being bought. Are the shares being bought to provide an income? If so, the level of income desired must be determined and the past performance of the shares in question examined to check if such an income level is probable or even possible.

Once the reason for buying shares has been determined, it is essential that potential stock purchases be researched comprehensively and time taken to consider the impact of purchase. What is the company’s financial history? Are any external factors influencing the share price, such as impending government legislation or imminent changes to the supply of raw materials (for instance the increasing price of oil and gas and its effect on energy companies)? There are many sources of information for research into companies and their shares.

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Bond Investing – Overview

By Revy Anandya Azhary

Bonds investing

Bond investing, like gold investing, is a low return/low risk type of investment. But bond investing can be far more complicated than it looks. It may also happen that the company that has issued bonds ultimately goes bust, then the people who have participated in the process of Bond Investing by purchasing the bonds issued by that particular company have nothing to do but consider their investment as bad debt, an debt that cannot be recovered.

Many investors maintain a diversified investment portfolio consisting of bonds, stocks and cash in varying percentages depending upon their individual circumstances and objectives. Because bonds typically have a predictable stream of income and repay principal at maturity, many invest in them to preserve and increase their capital or to receive dependable interest income.

When investing in bonds, it’s important to remember that an investment’s return is linked to its risk. Risks common to most all bonds include:

1. Credit Risk – financial risk that the issuer will not be able to repay the principal upon maturity as promised
2. Call Risk – longer-term bonds are usually callable. The bonds may be called before the maturity date if interest rates decrease.
3. Market Risk – if the bond must be sold before the maturity date, the bond may be worth more or less than the face value depending on interest rate movements.
4. Liquidity Risk – some securities are very hard to sell if there is a thin trading market or if the bond is relatively unknown.
   

Managing the various risks of bond investing is paramount to our overall fixed income strategy. Make sure that your risk tolerance is okay for the type of bond you have selected. Investors should also keep in mind that the more long term their bonds are, the more exposed they will be to interest rate fluctuations.

Know your needs Bond investing doesn’t fit everyone’s investment priorities.

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Best Stocks

Best Stocks to Invest in

By: Rick aurtus

Everything you have been told or read about penny stocks is a lie. Read on to find out the secret. Finding the correct way to trade these stocks is very easy…

When you know how of course.
For instance, people will get some IPO advice from a cheap broker to invest in a certain penny stock, or better yet someone they ‘trust’ then they research the stock by Googling the company to find out about the companies financials. Yes, trading penny stocks can be that easy to trade and I have made a small fortune trading them, even in this economic climate. The secret is you can make money on these stocks no matter the economy at the moment.

New Opportunities to invest in stocks come up all the time. Of course the information is very time sensitive.

I normally hold a stock for the medium term. So what is the right advice and what is the wrong advice? The truth is that it comes down to how reputable the company is that is giving you your advice on what stocks to trade.

Always do your own research and invest with common sense, even after you receive the correct advice from the right company. This company has earned me a small fortune.
I had the flash broker, who would give me advice on certain stocks, and that advice would normally mean nothing! I want to simplify the whole process when it comes to investing in stocks. I know for a fact that investing in stocks has paid huge dividends for me and other. First, know what you are investing into, I have seen people place trades because they were told they should, from some guy who had no history of profitable trades to do so! I personally have made a small fortune from trading penny stocks, and that would be my recommendation.


Why You Should Invest In Penny Stocks
By: Jim Pretin

Most people consider penny stocks to be a poor investment. I, on the other hand, think that investing in a penny stock before that company becomes profitable company is the best way to invest, because you can make a lot more money with penny stocks than would ever be possible with blue-chip stocks. Penny stocks are defined differently depending on who you talk to. Stockbrokers define them as any stock that trades below $5 per share. The Pink Sheets are an exchange where most startup companies first get listed. The reason why a company tries to get listed on the Pink Sheets, even though their stock will not go up in price because they have no sales to speak of, is because it gives their company more substance and credibility; it is typically easier to attract additional capital, obtain financing, and execute contracts and agreements if a company is publicly traded, even if it is on the Pink Sheets.

Companies listed on the Pink Sheets trade as ridiculously low as $0.00001 per share, all the way up to $500 per share and sometimes beyond. Foreign companies often have some of their shares sold in the United States by listing them on the Pink Sheets.

The OTC (Over-The-Counter) Bulletin Board is similar to the Pink Sheets. This exchange consists of relatively young companies either with no sales or a small amount of sales. Often, companies go from the Pink Sheets to the Bulletin Board once they are ready to become fully or semi-reporting.

Most publicly traded companies that are now listed on one of the major exchanges (NASADAQ, AMEX, NYSE), at one time or another, were penny stocks listed on the Pink Sheets or Bulletin Board. Rarely does a company go from being private directly to one of the 3 major exchanges. The hard part is finding the right company to invest in, because for every successful startup company, there is also one that fails within the first year or two.

Companies listed on the Pink Sheets usually do not officially report this number to the public, but with a little research, you can usually find out. It is usually contained in articles written about the company, or in TV or radio interviews with company officials that are sometimes archived on certain websites.

Companies with this kind of share count are likely having problems moving forward, so they have issued more and more shares to raise money just to stay alive. You want to look for companies that have approximately 5 to 100 million shares in their float.

Here are the questions you need to ask yourself when analyzing the probability that a company will be successful:

1. Barriers to Entry: Are there are obstacles that will make it difficult for the company to sell its products or services?
2. Patents: Is the product that the company is going to sell patented? A patent will prevent other companies from producing the exact same product.
3. Consumer Demand: Will there be a demand for what the company is selling? Try to set aside some money for investing in penny stocks and start while you are still young.

Read More About Basics of Stock Market Investing

Basics of Stock Market Investing

By Revy Anandya Azhary

Basics of stock market investing
Investing in stock does not have to be complicated. In order for you to succeed in this risky business, learning the basics of the stock trading would be an important factor for your financial growth. Stock investing is not gambling or getting lotteries for the sake of money. It is a smart decision that takes considerable amount of calculations and intelligence to make money.

While anyone can become a shareholder, most do not completely understand stocks. They usually buy something based on something they heard on the news or worse, from a friend. Most people don’t look at owning stocks as owning a piece of a business, but in fact, you are a part owner and in many cases, you have a say.

Before risking your money with the stock market, you should be able to recognize the factors vital in choosing which company to invest in. Here are some things to look at before you invest your money in stocks.

Minimize Risks Than Maximize Profits
Preserve capital is the first thing you should be thinking. It is not necessarily you have to take greater risk to get better return. Try to reduce the risk of losing money by knowing exactly what they you do and do exactly what you know.
Pick Quality Stocks

High quality stock must be supported by strong business performance. The company must have good Sales Revenue. This refers to the amount of money the company makes annually. Don’t invest in companies that continually lose money every year.

Besides sales revenue, you also must look at their earning. This also refers to the net income that reveals if company is making money or losing it. Companies with large earning have an advantage in the stock market. A savvy investor will never invest money in a company that is not earning money.

The company’s debt also acts as an important factor for high quality stocks. If a company is in debt, the money they have is for paying up for the debit alone. An intelligent investor prefers companies that have low debt level.
Calculate Intrinsic Value

Intrinsic value is the actual value of the stock. It can be the same or different from the market price. You can either use dividend, cash flow or earnings discount model techniques to value stocks.

After you know about the intrinsic value of a company, try to buy stocks when the market price is much cheaper than its intrinsic value. You will be getting huge compounded return if you manage to buy the stock at much cheaper price than it should be. It’s never safe to gamble your money away on some company you don’t even know. The basics of the stock market lie on the companies’ background. Always do researches about the company before you invest your money in the stock market.