Posts Tagged ‘Invest Stocks’
Combat Penny Stocks Fraud Using These Helpful Tips
Written by troy on Sunday, March 15, 2009 | No Comments
Categories: Uncategorized Tags: Invest Stocks, Investment Newsletters, penny stock fraud, Penny Stock Trading, penny stocks, Stocks Tips
Educate yourself
Make it a habit to research extensively about something before you jump into it. The access to information has never been this easy with the emergence of the internet. You can go online and learn a lot about penny stocks. You can also read investment newsletters and manuals like Standard’s & Poor’s and Moody’s. These reference materials will give you updated information on penny stocks as well as different tips that you can use to invest wisely.
Try to absorb everything you can about penny stocks before you actually go out and invest in them.
Be well informed
One of the ways that you can combat penny stock fraud is to be well informed. You must know how popular penny stock frauds work so that you will detect them once you experience it.
Look out for warning signs
Penny stock scams usually give off warning signs so you need to keep an eye out for this. Some of the common warning signs are insistent sales techniques, mismarked trade confirmations and unauthorized transactions.
Small companies usually use insistent sales techniques when to lure people to invest in their penny stocks.
A trade confirmation is a document evidencing that a transaction has been made. This is usually furnished by the stockbroker to the investor. It states basic information such as how many shares were purchased, investor information and the bid/ask price at the time of the transaction. If you receive a trade confirmation that is mismarked or has many errors, you must talk to your broker immediately. It can be an honest mistake or a scam, so it is better to be careful.
Even if you have a stockbroker handling your transactions, it is always better to be on top of things. Keep track of all the transactions that you made so that you can pinpoint which are the unauthorized ones. Transactions which were effected without your consent can be a potential penny stocks scam. Your stockbroker might place stocks in your account, or store stocks in your account for their own benefit, without your knowledge.
Talk to your stockbroker immediately if this scenario happens to you. Again, it can be an honest mistake, but it can also be a source of fraud.
Exercise caution and due diligence
In penny stocks trading, you are dealing with money so you have to exercise caution all the time. Due diligence is also needed so that you will know which companies can be trusted and which are fraudulent. Take it upon yourself to get to know more about the company and do important background checks before you enter into any transactions.
You can also research about other information about the company like its financial history and industry standing so you can have a better grasp of what the company is like.
By: Nir Dotan
About the Author:
Nir Dotan is a writer and promoter of
Penny Stocks
services, and
Penny Stocks Preferred source for the latest news and information on the best and brightest Small Cap Stocks.
Penny Stock Trading – How to Wisely Invest $1,000 With Penny Stocks
Written by troy on Saturday, January 24, 2009 | No Comments
Categories: Uncategorized Tags: Business Plan, Invest Stocks, Online Stocks
Most stock market beginners have the wrong approach to penny stocks though. They buy them because they look cheap. The shares just cost a few Dollars or Cents, how can that money be wasted?
Actually, most money which is flowing into penny stocks is wasted. One reason is that many penny stock companies are bad companies with bad management, zero earnings and bad outlook. It is a sad fact that most of these companies will disappear. It is also a fact that there is a lot of fraud going on in this market. There is a lot of hype, misleading information and penny stocks get pumped and dumped every day for different reasons.
The idea of a young and small company to go public to get some money is still great. How else could a company finance its ideas? But this is exactly how you must approach the penny stock market as an investor. Check the management, the people behind the company. Do they have the knowledge and experience to make this company succeed? How are their financials looking, their business plan. Does it all make sense?
You will be surprised how much information you can get about a company and their management in the Internet. Do not just rely on the information the company gives you directly from their web site. Fraudsters are quickly identified because it is probably not their first bad deal they did.
Look at the business idea, the product or service they want to sell. Do some research, contact established competitors and try to get information about the market. Get data from third parties.
Penny stocks are popular because you can make a fortune with little cash investment. But you have to invest some time and work to find the gold nuggets. Do not look at the price of a stock. With just $1,000 to invest you could buy 1 or 2 Google shares or 100,000 shares of a 1 Cent penny stock. Which one will you make more money? This is the question to ask yourself.
Ignore share price when dealing with penny stocks. Look at the company instead.
By: David A. Sorenger
About the Author:
Highly Recommended Reading:
David A. Sorenger is an expert author on stock market related topics. His articles about stock trading, online stock brokers, stock options and penny stocks have been published on numerous web sites, forums, blogs and e-zines all over the Internet.