Penny Stocks To Watch For Maximum Profit

Very few forms of investing can give as quick returns as penny stocks can. While they have a huge potential for making a lot of money very quickly, they are also very risky and require some research before they are blindly invested in. With the right information, you can know exactly which penny stocks to watch and which ones not to waste your time with!

Penny Stocks To Watch For Maximum Profit

Why are penny stocks so risky?

The reason penny stocks are so risky is because it does not take a lot for a $.30 stock to drop to $.15. This would cut your investment in half! On the other hand, it is not hard for that $.30 to go to $.45. This would give you an amazing 50% ROI in a very short amount of time.

Doing research and cutting out some of the risk!

Most investors have no idea how to do proper research. Some people even invest on gut feelings alone. Believe me, there is no quicker way to lose your shirt than that!

When researching a company, you should look into every detail. Find out who the CEO of the company is. Look at his or her history and see if they have done a good job in the past. Many companies have less than outstanding CEO’s to say the least. Look at their history and see if they have been an ethical company. Do they give back and do people generally like them?

Commonly overlooked things like this can make all the difference in deciding if a company is worth taking the risk of investing in.

Finding companies with reliable trends!

One of your most powerful tools is past trends. Trends can be very easy to spot out. Sometimes they are a little harder to find.

There are plenty of companies that do very well during one part of the year and not so well in other parts. These “seasonal” companies make for great lower risk investments and are penny stocks to watch. Just take a look at the 2-5 year history of a stock price. You might be surprised how easy it is to spot obvious trends that you can use to your advantage.

Making a list of stocks to invest in over and over again!

If you can find several penny stocks with such obvious trends, and they are out there, then you can make a list of the best times to invest in them. This can eventually lead to you never missing an opportunity to ride the trend upward and make a nice ROI with very little effort!

If you do some proper research and pay attention to history, then soon you will have a good foothold in penny stocks.

Article Source: http://www.streetarticles.com/stocks/penny-stocks-to-watch-for-maximum-profit

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