By Sam Chim
Penny Stocks can be a very effective way to provide you with a
secondary income. They can be used to create passive income
because they do not require you to be constantly watching over
them. The problem that most people have when it comes to
is - not knowing the right time to sell.
Penny Stocks can rise very quickly but they can also fall
quickly too. The reason that most investors hold onto a stock
is because the fail to separate their emotions from their
All of your penny stocks buying and selling should, of course,
be based on sound research both of the market and the
companies’ recent history. How the company is doing in terms
profitability, whether they are just about to, or have just
announced profits, losses or new patents, discoveries and
products, can all affect your decision on whether, or not, to
Knowing the right time to sell your penny stocks however can
sometimes seem, as much an art as a science, although getting
it wrong can be fatal. Many people seem to put all their
research efforts into knowing what penny stocks to buy and
to buy them.
Investors seem to forget about researching to sell stocks.
Instead, they let their emotions take control and sell at the
wrong time. Investors selling at the “wrong time” fall into
categories. These categories are, The Runners and The Sitters.
The Runners like to take profit way too early. They see their
Penny Stocks rise a little and sell because they don’t want to
“risk too much”. I’ve seen it time and time again; these
set out to earn a 25% Return on Investment and end up taking
profit at 1%. Someone who takes profit twice at 25% earns a
more than someone who takes profit twice at 1%. Usually, as
as they sell a penny stock, it will rise even further and
they’ll be wondering why they sold so early.
The Sitters are the heavily emotionally involved in their
stocks. They are gamblers at heart and just do not want to let
go of a losing position because “it could bounce back any day
now”. When they do let go of their Penny Stocks - there is
virtually nothing left. The sitters like to sit on a losing
position. They like buying but dislike selling.
Do you want to be a Runner or a Sitter? Well, I hope you are
neither. You want to be a winner. A winner will separate their
emotions from their investment thinking and will also research
when buying and also when selling. They will buy and they are
not afraid of selling.
There is great deal of profit to be made from trading in Penny
Stocks. But you have to know not only what to buy but also how
long to keep it and when the best time to sell. The answer, as
with most things in the world of finance, is good information
and research. But that doesn’t end when you buy. Find out why
your penny stocks are rising and this will put you in a much
better position to know when to sell.
About The Author: This article was written by Sam Chim. To
out more about investing in penny stocks, please go to