How To Pick Top Penny Stocks
Picking top penny stocks is an inexact science. Unlike buying stock from well-established companies that comprise the Dow Jones Industrials, for example, there is a much higher risk when investing in penny stocks. There simply isn’t as much information available for penny stocks versus those traded on the New York Stock Exchange. The information that actually is available for top penny stocks is unreliable. How do you go about finding the top penny stocks?
The best way to pick the top penny stocks is to combine your own research with professional advice. There are many penny stock selection services available. When you join one, they might be partial to a particular penny stock for a variety of reasons. It could be sincere – the firm might really believe that a particular buy is one of the top penny stocks. On the other hand, it could be underhanded – the firm might be receiving some kind of “incentive” for getting you to purchase a particular stock. Regardless, just because your selection service tells you to pick a particular penny stock doesn’t mean that you should.
Conversely, don’t throw all of your money into something you deem a top penny stock from your own research. Your judgment might be a little clouded from all of your research. You worked so hard to find a top penny stock that you want your pick to work out, even if it isn’t a good buy. This is especially a problem if you don’t have any investment experience, or have had failed investments in the past.
The best approach, then, is to combine the advice of a professional with your own research. If your selection service tells you that XYZ Corp is a top penny stock, find out why. Investigate the company. Get as much information as possible about the company, especially press releases and other media buzz. Draw your own conclusions about the company from your information gathering. Make sure your research confirms the numbers and details that your selection service provides. After thorough evaluation, make sure that the stock fits your risk tolerance, investment objectives, and investment timeframes.
In fact, before you begin picking stocks, you should put yourself through a thorough and honest self-evaluation. Ensure that you thoroughly understand your own financial situation, investment goals, and tolerance for risk. Then, after your own research into potential stocks is conducted, watch and track the stock before buying. Check its fluctuations. Follow the media and consumer buzz regarding the company and see whether the stock reacts negatively or positively. If you find that the price of the stock has gone up since you began your research, you might feel as if you’ve missed out on an opportunity. Fear not, however. If this is the case, it can be a good indication that your method of picking the top penny stocks is a reliable one. Rinse and repeat your formula and see how you fare. You might find that you’re on to something.