Penny stocks are volatile enough without broker scams, falsified company documents, and a lack of market knowledge. So how do you protect yourself to minimize your risk? If you are investing in penny stocks, you already know there is potential for turning a small amount of capital into a sizable profit. Whether you are investing a lot or a little into penny stocks, watch out for these red flags, it just might save you a small fortune. The Hot Tip - When you read or hear about a stock that is guaranteed to go through the roof, look out. Most investors that have this type of inside information would keep it to themselves. Sadly, there are people who get paid to start these rumors. This false tip could cost you if you do not do your research on the company before investing. Commission Free - Don't be fooled. Not many things are free and stocks are no different. What you are likely getting is stock directly from the company or a promoter who have already tacked on a little extra.
Guaranteed Performance -It is highly unlikely that these stocks will go up. More often than not this is a self-serving promotion tactic. Sinking Ships - Just remember that a 'good bargain' is relative. The price may have hit rock bottom because the company is going under. Be very cautious.
Very Low Volume - Simply stated, this is often the case with penny stock scams. It is extremely difficult to determine where these stocks are headed and it could be hard to sell.
The old cliché 'If it is seems too good to be true, it probably is', is a good motto when it comes to press releases, forum posts, various websites, and advise. No one likes to be sold, and when your broker, a salesman or anyone else seems to be pushy or over the top... run! There is good chance there is some shady activity taking place.
Always do your due diligence. Although there is a large degree of luck associated with penny stocks, if you have not researched your companies, you are likely to end up losing your hard earned money. Knowing these warning signs should only be part of your investment strategy. An investors goal is always to make a profit.
Abou
Guaranteed Performance -It is highly unlikely that these stocks will go up. More often than not this is a self-serving promotion tactic. Sinking Ships - Just remember that a 'good bargain' is relative. The price may have hit rock bottom because the company is going under. Be very cautious.
Very Low Volume - Simply stated, this is often the case with penny stock scams. It is extremely difficult to determine where these stocks are headed and it could be hard to sell.
The old cliché 'If it is seems too good to be true, it probably is', is a good motto when it comes to press releases, forum posts, various websites, and advise. No one likes to be sold, and when your broker, a salesman or anyone else seems to be pushy or over the top... run! There is good chance there is some shady activity taking place.
Always do your due diligence. Although there is a large degree of luck associated with penny stocks, if you have not researched your companies, you are likely to end up losing your hard earned money. Knowing these warning signs should only be part of your investment strategy. An investors goal is always to make a profit.
Abou
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