By Sam Chim
If you are looking are thinking that Penny Stocks are a “Get
Rich Quick Scheme”, I’m sorry to disappoint you. Although
fortunes can be made from penny stocks, people can also lose
everything they invest in Penny Stocks. The most important
investment you can make at the start of your investment career
is to invest in education.
Why Education and not stock?
Diving head first into the stock market is a great way of
losing your money which is why we don’t recommend it. The best
thing to do is to read, read and read some more before
investing. One of the best places to get free information on
penny stocks and trading methods is from the internet.
Forums, websites, news sites and eBooks are a great way to
improve your penny stock investment education. There are some
great books that you can borrow from libraries or purchase
cheaply from shops.
When reading on the internet, please be cautious of stock
recommendations and strategies and methods. Stock
recommendations and opinions from internet forums can be
and cannot be fully trusted without doing your own research.
Similarly, eBooks with strategies which promise great returns
usually do not work as suggested. The reason for this is, even
if the strategy worked well for the author, there is no
guarantee that it will work for everyone else because everyone
is different although you may learn something that you did not
Google News has a business section which is group for free
up-to-date information on stocks. Yahoo Finance also has good
news section and also provides free charts and company
No matter who you get advice from, whether it’s from a
financial consultant or friend, you should always carry out
your own additional research. You should make decisions based
on facts rather than opinions.
When you feel confident enough you can try some “test trades”.
You can either keep a record of your trades on paper or you
use a stocks simulator website where you invest with “fake”
money. There is a website called Champion Investor
(ChampInvest.com) which is great for this purpose as it also
calculates profits and losses automatically. Also, if you the
top performer of the month, you will be rewarded with £1000.
Using a stock simulator means that you will not lose your
hard-earned cash if you make a bad investment. Instead, you
will learn not to do it again without losing your money.
If you are consistently able to make a profit with your “test
trades” then you can move onto the real thing. Keep your
investment strategy exactly as it was when you were making
profitable test trades, but instead of using “fake” money, you
will be using your own money through a stock broker.
So, to summarise - if you are looking to get started in penny
stocks, please do not dive in head first without investing
About The Author: Sam Chim is an experienced penny stock
investor. For more great penny stock advice, please go to his