Picking Penny Stocks

Before investing your hard-earned cash into penny stocks, it’s important to research the penny stocks you want to invest in before committing any cash. You want to find profitable penny stocks. To do this, you’ll need penny stock leads. Leads are just names of penny stocks that you are thinking of investing in.

There are many ways to get penny stock leads. For example, searching the internet (blogs and forums), joining a penny stock mailing list or keeping an eye out on the news. The main idea is to build a list of around 5 to 10 quality leads that are worthy of your money.

After you have a list of leads, you’ll want to choose one or two of them. You’ll need to go through your list and discard stocks which do not meet your criteria. This process can be tedious but it will be well worth it in the end.

The criteria to look for includes – company history, business plan, opinions of individuals and experts, financial information, competition, track record of the board of directors, company reports and broker recommendations. Using the variables, you can quickly establish whether a particular stock is worth investing in.

Once your list has been cut down to 1 or 2 stocks, ask for opinions from other people to confirm your selections. It is very important to listen to the views of other investors because, in most cases, they’ll have something valuable to contribute to your research. Perhaps, you missed out a vital piece of information which other investors could highlight for you.

Now that you have 1 or 2 stocks out of your original list of 10, you should feel confident that you’ve done your due diligence and you should be ready to invest. If you use this process every time you’re investing in penny stocks, it should prove to be simple but profitable.

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