Investing in Penny Stocks – How to Invest in Penny Stocks Profitably

Investing in penny stocks has its share of ups and downs, tips to be adopted for greater success and pitfalls to avoid. This isn’t gambling if you know what you’re doing. You need to think of it as increasing the value of your investment portfolio with smaller seed capital but with larger returns to compensate for the higher risks involved. 

The Upside

With these stocks, you can start investing and earning with as little as $100 to open your online account.  Indeed, you are well advised to start with a minimal capital investment while you are learning the ropes of the business.  It does not help your stock investment portfolio to put in more than you can afford to lose!

Another benefit of investing in penny stocks is that you can have huge profits out of small investments. Well, of course, you have to know the basics of the business before this happens but the potential is exciting. Also, you can avail of the services of online discount brokers for these investments. Unlike traditional stockbrokers, you can save on the high costs of sundry service fees and commissions with these discount brokers.  In effect, your bottom line will benefit. 

How To Invest Profitably

In order secure the most benefits out of investing in penny stocks, you can apply the following tips: 

  • Look for the stocks with the highest price-earnings ration but the lowest price-earnings-growth ratio. 
  • Stick to your entry and exit plans.  You must control your monetary greed even when it seems that the penny stock in consideration will rise in value after you have reached your profit limit – it often will not move in the way you predict or desire. 
  • Go with the market flow.  You cannot control the market and as such, it is futile to want to change it to suit your profit objectives. 
  • Make decisions based on reliable information coming from the thorough analysis of charts and other tools necessary for successful investing. Inside information and hot tips can be manipulative practices meant to deceive investors and, hence, rob them of their money. 

The bottom line is that these stocks operate in similar ways as their Big Board-listed stock counterparts.  Hence, you can apply your knowledge in mainstream stock trading to penny stock trading with a few revisions to account for the higher risks involved. 

The Risks

Speaking of risks, you must avoid the pitfalls that come with these investments. Keep in mind that these stocks can be very speculative and can be easily manipulated, which means that investors must maintain vigilance over their investments decisions.  One of the most notable pitfalls in trading these stocks is the provision of misleading financial statements to investors.  You have to double check with independent bodies like the Securities and Exchange Commission, when applicable. 

Investing in penny stocks is a good decision where your investment portfolio is concerned.  You can enjoy the benefits just as long as you adopt smart investment management and avoid the pitfalls.

Investing Is Boring

To quote one of the best investors in the world today, George Soros, he says, “Investing is boring, if you’re having fun doing it, you’re probably losing money.” What does he mean? He’s referring to the many hours of research, analysis, and digging for good info required to invest successfully. Anyone can read a 5 minute article on Bloomberg or CNN Money, but these kind of resources rarely yield the kind of information you’ll need to be successful as an investor. I won’t get into why, but suffice to say that research is hard, and good research is harder, nobody gives it away for free, and if it’s that good, they don’t give it out at all, they use it to get rich.

Think of quality research as inside information; you have it, and if you let it out, you’ll lose your advantage. This is why it’s imperative you do your own research, or at least find a top notch service, which in all likelihood will cost you money. You don’t work for free, and neither do they. Knowledge is power, we live in the information age. Understand this, and you’ll understand why you won’t get the gold nuggets by spending 5 minutes on Bloomberg or CNN.

What’s more, practically nobody is willing to do the hard work of researching for good, solid info. The majority of investors reflect our society, they want it now, with no effort, and preferably no cost. It’s this attitude which makes them easy prey for the pros in the market, who put out these articles and all too often, have trades put on to profit from the lazy investors who will invest due to these articles.

This attitude also explains why so many traders lost so much money on oil’s fall. They didn’t understand the forces behind the fall, and nor were they educated on how the energy market had developed extreme excesses of production and supply over the last few years. The most in history in fact. Had they done their homework, they would’ve known that the EIA was warning about oversupply since 2013, and every US refinery was at or near capacity for supply. Instead, investors mistakenly believed that because oil had been at $100 so long, it had to go back there soon, market forces would drive it there. But market forces had changed dramatically, and there were many powerful changes occurring to bring oil down at the fastest rate in history.

We now know all the facts, and it’s all too clear why oil fell now. In fact, now that the facts are out, many mainstream sources are suggesting we could even see $20 oil. None of this matters though, the damage is done and the move has occurred. Whether we go to $20 or not is not as important as falling from $110 to $45. Nobody is making money in oil now, except the Saudis and a few Middle Eastern nations. They have the lowest cost per barrel of any producer in the world, which is why they don’t mind letting these prices remain, they know they’ll be the last man standing, and can then jack prices up as high as they want. But they can’t do that until the competition is removed.

See the game being played? You think traders would’ve bet on oil going down had they known this? No way, they would’ve made money shorting oil instead, like some did. So, the name of the game is information, the better yours is, the more money you’ll make. Don’t scrimp on it, but don’t assume that anyone who charges you big money will provide great info either. Choosing an information source is the most important decision you will make for your investments. At Wealth Management Vancouver, our edge is information. Our clients know the value of it, and because they profit from it, the cost is entirely justified.

Sitcom Investing

A fickle stock market encourages good-humored mockery.

Recently, as I watched the premiere of a sitcom, an obvious omission breached television etiquette. Silence followed every exaggerated comedic set-up. There was no laugh track. Where were the premeditated giggles from the show’s “audience?” At last, the viewer determines the funny moment.

It then occurred to me, the writers of this new show adopted an aspect used by investment news programs.

I will be the first to admit, in addition to the miscellaneous printed and electronic financial information, the television provides an abundance of supplemental financial news. However, the shows often leave me asking, “What’s missing?” In addition, the shows may very well leave viewers with the ultimate responsibility, which segment is entertainment and which is practical advice.

Perhaps you may recognize one of the canned statements below that investment show gurus continuously utter. Although each may be applicable (and in may cases vital to successful financial planning), notice the missing “laugh tracks.”

How many times have you heard “Invest For the Long Term?” The analyst may be leaving out “because I hope you forget my last appearance and the short term disaster I have caused for the viewers who actually acted on my recommendation.” Each investor’s long-term outlook is somewhat different for the other’s and you should always review the guests’ recommendations with caution. What is his or her reasoning for such revelation?

“Buy and Hold.” The missing part: “because I have no idea of an exit strategy to recommend.” True enough, the more successful investors are those who invest according to a well-planned strategy and stick to it. They generally hold onto their winners. There are, however, times that will dictate an exit strategy.

Finally, there’s “Use Asset Allocation.” The missing part: “because I cannot tell you which asset historically does better in this particular market environment.” There are many ways to accomplish diversification in your portfolio and it does not always have to revolve around the division of stocks, bonds, and cash. Depending on your particular objectives, time horizons, and risks, an appropriate allocation may be derived from the use of just one type of asset. Either way, there are no guarantees when you place your money in the stock market and it is best to remind yourself of the risks of each investment. Try including real estate, collectibles and insurance products in your general financial plan.

We can all watch the appearance investment gurus make on financial shows. Perhaps we can include light-hearted follow-up statements as if we were watching a Rocky Horror film. We often enjoy the amusement provided by television personalities, however, it is important to review your investments regularly. Always examine your motive behind each buy and sell.

In actuality, your financial future is no laughing matter and should be guided with thorough commentary. Television shows come and go; your finances may one day be a legacy.

The Keys to Success to Investing in Real Estate

Most real estate professionals flunk within the first few months of trying to create a business enterprise out of real estate investing. The trick begins with a beneficial marketing plan and then practicing a disciplined effort to the marketing plan on a even basis. There is a lot more required to succeed, and you will encounter more tips, tricks and unique real estate marketing techniques in this article.

Is there anyone in your town that doesn’t recognize that you buy homes or that you are a real estate professional? If so, you aren’t performing as well at marketing or rendering real estate investing information about your real estate investing business enterprise as well you could be. I find out real estate investors telling all the time that they aren’t receiving seller phone calls and subsequently aren’t receiving the leads they need to find the real estate business deals they require to earn a living. I say increase the marketing and the sellers will Call. Not only that but if you are canvassing the world (or at least your area) that you buy problem real estate holdings, eventually you will be acknowledged for what you do and sellers will telephone you strictly on your reputation. this is what is called cost effective marketing.

One real estate professional was in a home, garden and hardware store a few calendar weeks ago and went past a couple of guys in an aisle. A conversation was heard while he walked by, I overheard one state, “That is the real estate man”. Now I had never known either of those men and have no idea who they are but that experience lets me acknowledge that I must be doing my business at letting the world to recognize my business is buying real estate in that area. There are many ways to let the area know that you are in the real estate investing profession and getting information out there that helps people realize you buy foreclosures, distressed real estate, do real estate short sales and have got a lot of real estate information and experience to flip properties. Some methods are cheap and some are more expensive. You are going to have to attempt many things and acquire a feel for what brings about for you the best results in your region to get the calls you require to transact real estate deals. I have tried many forms of marketing methods for real estate commercial enterprises of all varieties and have come back to a few that consistently create enough leads for me to purchase the 2 or 3 real estate holdings and houses I want to purchase every single calendar month. They are as follows:

Classified Ads

The classified advertisement in the most prominent newspaper in the region is by far the heaviest producer of leads for local real estate investors that I have determined. I understand it is costly and I understand there are instances it does not generate phone calls but if you are going to persist in the real estate investing business sector just place it in there and leave it. Get used to it making up part of the toll of performing the real estate business. You may expend about $350.00 a calendar month for my 4 line ad and that is the commercial range. I’d consider running it 365 days a year to constantly cue everyone that you are a real estate professional and you purchase real estate in their region.

Over the past few or so years I have watched many “real estate investor” ads come and go. Most folks put them in for a many or even just a couple of calendar weeks and then remove them or try just placing them in on the week ends. Real Estate Marketing just simply does not work this way. Put your real estate ad in the paper and leave it in there. It will more than make up for the price, trust me, and you will see after you finish your first deal. If you are distressed because there are real estate investors ads from many other investors in there, don’t be. They are there because they are getting responses. Just be sure to and actually answer your cell phone and keep it on all the time otherwise you’ll be squandering money.

When a fresh ad for real estate investor information shows up in my newspaper, I will always call on the advertisement. 9 times out of 10 I get a message device or answering service. This is a significant turn off to somebody who needs a resolution to their real estate trouble now. They want to speak to a person who can quiet their anxiety over their current issues with their home and tell them everything is going to be ok. Your answering device won’t do that, they need a human being. As for what to put in the advertising, you will have to work on this one. I have tried various idea and the one I have now hast not changed for over 4 years. I haven’t switched it because I get responses. My ad is:

We Pay CASH FOR HOMES In 24 Hours! Any area, price or condition Call xxx-xxx-xxxx

Now I have had other real estate professionals jockey for place and interchange their ad copy to be leading of mine in the column but it has not made whatsoever difference, at least as far as I can discern. Don’t worry about those things, just get the advertising out there and leave it. It could possibly take a bit of time, perhaps a several weeks to get going but sellers will telephone. As soon as you have your classified advertising running, then you should start working on your other marketing techniques right away. If you only go through one idea a week, within a few weeks or a couple of months you will have a significantly powerful real estate purchasing process.

Ads in the “Freebie” Papers

You might also run advertisements in the freebie papers in your local region or the region you want to conduct real estate investment deals. These are the “Thrifty Nickel”, or whatever they are named in your region. We run both a column ad and a display in this newspaper and expend about $175.00 or so a calendar month for these ads. They pull in seller leads reasonably well and have always rationalized the costs. Remember that these guys are usually open to talking terms on your rates and you will probably get a better rate if you commit to a longer advertising agreement.

Bandit Signs or Road Signs.

Bandit signs are great. They are some of the best lead producing tools around. I have yet to put out a bunch and not be bombed with calls right after I arranged my marketing. I just don’t position them out that often. I might place out a few to a half dozen or so a calendar month and the ones that continue and don’t get taken down continue to pull in phone calls. At an average price of less than $4.00 per sign, they are one of the greatest real estate marketing and advertising values available. Check the net for sign manufacturers for discount signage costs. I use 18 x 24 signs and set them at high traffic crossings around the town I wish to purchase houses in.

I also position a sign in the front yard immediately after purchasing any house. I have purchased several homes in the same regions as a result of marketing this way.

You can either use wood stakes or the wire stakes with your signs. I like the wood stakes because they do not bend like the wire ones, in addition, they are more less expensive and you can find just about any reasonably sized stick of wood or stake at your local hardware store for a really good value. Just get long lengths and trim down to fit. Then just nail the sign to it with the roofing nails with the orange or green plastic tops or you can use screws. There are many variants on what the wording on the sign can say. Keep in mind that traffic will be moving so you want to keep your message short and simple so it may be read. Plus your telephone number must be big, large and easy to read.

If you search the sign advertisement content, you will discover that it is same resemblance my paper ad. I like to brand my advertising because I believe that helps with identification that is probably why the two guys noticed me as a Real Estate Professional..You want to have contrast, so a white sign with dark blue letters usually is the best draw. Some folks swear by black on yellow or black on orange. Again, I say it’s not what or how you say it rather simply that you’re out there marketing and placing out signs that counts. You’ll build a ‘brand image over time if you stay logical with your real estate marketing endeavors. When dealing with bandit signs, be sure that your local code enforcement laws are aware of them. In some areas or counties they can lax on them but a few miles down the road in another county or city, they can be super strict and will ticket you in a minute, pull the signs down and lead off looking for your next posters to go after you again. Some retail merchants in high tax areas can’t put out any A board signage without having them sized and then fined.

Flyers and Bulletin Board Postings

Flyers and related collateral are another cheap way to get the word out that you are a real estate investor buy property, foreclosures or distressed properties. Just create a flyer with any one of the free on-line flyer software internet sites telling people that your are a real estate investor and how to get in touch with you. Make copies for few cents apiece and you have some really inexpensive real estate marketing and advertising. It really is that simple. Then place these flyers on every bulletin board in your Town or region you would like to buy your property, foreclosure or distressed home.. I also recommend that you place some of them in those plastic sheet shielders so the rain won’t ruin them and put them up on phone poles around neighborhoods I like to buy property in.. While not as prominent as the bandit signs, on poles actually in the neighbourhood they still attract phone calls. I carry a file with me in my automobile and put them up whenever I stop at a grocery store or major discount shop or really wherever. Some of the other area to put them are:

· Laundromats

· Taped to the inside of telephone Booths.

· On the counter of any business organization that will let you place them at.

· Bulletin boards at any local or major rebate store (lots of traffic)

· Grocery store bulletin boards

· Fax to Mortgage agents, call first

· Fax to Real Estate Agents, call first and they may get a lot of these.

· Take them Door to Door in target regions

· Employment centre Bulletin board

· County Courthouse or public office Bulletin board

These are just a few illustrations. Any place that will allow you to set one is a good place. You can never let too many people know that you are a real estate investor and are in the foreclosure market.

Imprinted and/or Promotional Items

Optimum Real Estate Investor Marketing Ideas – These no-lose ideas are sure to get you top hits on leads and calls for your Real Estate Investing occupation.

These are some of my favourites and most fun. While they are not the top producers of leads or the least costly, they will sure position you apart from the average investor.

Pen Knives – These tiny Swiss army knives are the neatest things. They are actually key chains etched with your content, mine being: WE BUY HOMES – All cash or take over payments within 24 hours! Call xxx-xxx-xxx I assure if you give one of these to somebody they will hold on to it it and if they conceive of selling, they will think of you. They are about $1.75 each.

Key Chains – I give these to all my buyers with the keys to their new house on them and leave them all over the place. They come in the shape of a house or #1 or whatever style you like and have your message on them. You can guess what mine says. Cost – about $. 25 cents apiece.

Pens – I use these all the time. Whenever I sign a sales receipt or anything I leave my pen. I cannot tell you how many outcries I have gotten off of these things and since I often need one, I always possess one to give away. My attorney even has a supply on his closing table. I possess two types printed. One for sellers says “We Buy Homes!” and one for buyers says “Everyone Qualifies”. Cost – about $.26 cents per unit.

Coin Holders – These you hardly find anymore so everyone is surprised when I have them. I leave these things everywhere. Mine are bright yellow with blue letters and my message. Cost – about $.30 cents apiece.

I leave all of these promotional items everywhere, on the top of gas pumps, on end-cap displays in grocery stores and in department stores. I look at it this way, if I give away 100 pens, 50 knives and 50 coin holders a month, that is only a little over $100 bucks a month. That is still cheap advertising. And with the money you can make in a real estate deal, it is ‘no cost’ marketing strategy. You can get any of these promotional advertising products at many major promotion marketing manufacturer, and you can find companies online as well.

Business Cards

I order business cards by the 1000’s and you should as well, there are a lot of great places online that can print up nice (and cheap) cards for you and that specialize in real estate as well. As for business cards, well, they are cheap, mine are about $50.00 for 2000, and I pass them out and leave them everywhere I possibly can. I leave my cards everywhere, in pay phones, on restaurant tables, my kids even have their own supply to pass out. Try to get a box a week out. The card doesn’t have to be fancy, in fact the simpler the better. My card is bright yellow with blue letters and says:

WE BUY HOUSES Foreclosure? Need Repairs? Bad Tenants? Divorce? CASH IN 48 HOURS! OFFERS MADE ON ALL CALLS! XXX-XXX-XXXX

Car Magnetics

Magnetics are one of those things where you spend once and get use for a long time. Mine cost about $75.00 and are yellow with blue letters. They say:

WE BUY HOUSES! FA$T CA$H XXX-XXX-XXXX

or

SELL YOUR HOME FAST WE PAY CA$H XXX-XXX-XXXX

I have gotten several deals from these signs. Remember to order a smaller set for the back of your car/truck. People have more of a chance to read the message when they are riding behind you.

Clothing

I like golf shirts and oxford dress shirts with my logo on them. There’s plenty of adverting houses that will help you design a logo if you don’t have one or use the one you already have. There is no charge for set up and all items ordered include your embroidered logo free.

I pass custom imprinted hats out to everyone I know who wears one and have given away many shirts as well. They really look nice and present a nice image for your business.

Other Advertising Tools

There are many other shapes of advertising, some I have tested in the past such as billboards, door hangers, yellow pages, television and radio advertisement. I even have a traveling billboard, an old SUV painted bright yellow with blue WE BUY HOUSES! and my telephone number that I drive around and park overnight at dissimilar places. It brings the calls! Get the marketing going and let the world know who to call when they have a house to sell, a pre-foreclosure, distressed property or someone who just wants to get out of their house.. If that phone isn’t ringing, you aren’t making money so you need to get a good marketing strategy going and stick with it!

I sincerely hope these tips will help you in your next real estate marketing efforts and get you the real estate investing deals you’re after.

Information Feedback Loops In Stock Markets, Investing, Innovation And Mathematical Trends

It seems that no matter how complex our civilization and society gets, we humans are able to cope with the ever-changing dynamics, find reason in what seems like chaos and create order out of what appears to be random. We run through our lives making observations, one-after-another, trying to find meaning – sometimes we are able, sometimes not, and sometimes we think we see patterns which may or not be so. Our intuitive minds attempt to make rhyme of reason, but in the end without empirical evidence much of our theories behind how and why things work, or don't work, a certain way cannot be proven, or disproven for that matter.

I'd like to discuss with you an interesting piece of evidence uncovered by a professor at the Wharton Business School which sheds some light on information flows, stock prices and corporate decision-making, and then ask you, the reader, some questions about how we might garner more insight as to those things that happen around us, things we observe in our society, civilization, economy and business world every day. Okay so, let's talk shall we?

On April 5, 2017 Knowledge @ Wharton Podcast had an interesting feature titled: "How the Stock Market Affects Corporate Decision-making," and interviewed Wharton Finance Professor Itay Goldstein who discussed the evidence of a feedback loop between the amount of information and stock market & corporate decision-making. The professor had written a paper with two other professors, James Dow and Alexander Guembel, back in October 2011 titled: "Incentives for Information Production in Markets where Prices Affect Real Investment."

In the paper he noted there is an amplification information effect when investment in a stock, or a merger based on the amount of information produced. The market information producers; investment banks, consultancy companies, independent industry consultants, and financial newsletters, newspapers and I suppose even TV segments on Bloomberg News, FOX Business News, and CNBC – as well as financial blogs platforms such as Seeking Alpha.

The paper indicated that when a company decides to go on a merger acquisition spree or announces a potential investment – an immediate uptick in information suddenly appears from multiple sources, in-house at the merger acquisition company, participating M&A investment banks, industry consulting firms, target company, regulators anticipating a move in the sector, competitors who may want to prevent the merger, etc. We all intrinsically know this to be the case as we read and watch the financial news, yet, this paper puts real-data up and shows empirical evidence of this fact.

This causes a feeding frenzy of both small and large investors to trade on the now abundant information available, whereas before they hadn't considered it and there wasn't any real major information to speak of. In the podcast Professor Itay Goldstein notes that a feedback loop is created as the sector has more information, leading to more trading, an upward bias, causing more reporting and more information for investors. He also noted that folks generally trade on positive information rather than negative information. Negative information would cause investors to steer clear, positive information gives incentive for potential gain. The professor when asked also noted the opposite, that when information decreases, investment in the sector does too.

Okay so, this was the jist of the podcast and research paper. Now then, I'd like to take this conversation and speculate that these truths also relate to new innovative technologies and sectors, and recent examples might be; 3-D Printing, Commercial Drones, Augmented Reality Headsets, Wristwatch Computing, etc.

We are all familiar with the "Hype Curve" when it meets with the "Diffusion of Innovation Curve" where early hype drives investment, but is unsustainable due to the fact that it's a new technology that cannot yet meet the hype of expectations. Thus, it shoots up like a rocket and then falls back to earth, only to find an equilibrium point of reality, where the technology is meeting expectations and the new innovation is ready to start maturing and then it climbs back up and grows as a normal new innovation should.

With this known, and the empirical evidence of Itay Goldstein's, et. al., paper it would seem that "information flow" or lack thereof is the driving factor where the PR, information and hype is not accelerated along with the trajectory of the "hype curve" model. This makes sense because new firms do not necessarily continue to hype or PR so aggressively once they've secured the first few rounds of venture funding or have enough capital to play with to achieve their temporary future goals for R&D of the new technology. Yet, I would suggest that these firms increase their PR (perhaps logarithmically) and provide information in more abundance and greater frequency to avoid an early crash in interest or drying up of initial investment.

Another way to use this knowledge, one which might require further inquiry, would be to find the 'optimal information flow' needed to attain investment for new start-ups in the sector without pushing the "hype curve" too high causing a crash in the sector or with a particular company's new potential product. Since there is a now known inherent feed-back loop, it would make sense to control it to optimize stable and longer term growth when bringing new innovative products to market – easier for planning and investment cash flows.

Mathematically speaking finding that optimal information flow-rate is possible and companies, investment banks with that knowledge could take the uncertainty and risk out of the equation and thus foster innovation with more predictable profits, perhaps even staying just a few paces ahead of market imitators and competitors.

Further Questions for Future Research:

1.) Can we control the investment information flows in Emerging Markets to prevent boom and bust cycles?
2.) Can Central Banks use mathematical algorithms to control information flows to stabilize growth?
3.) Can we throttle back on information flows collaborating at 'industry association levels' as milestones as investments are made to protect the down-side of the curve?
4.) Can we program AI decision matrix systems into such equations to help executives maintain long-term corporate growth?
5.) Are there information 'burstiness' flow algorithms which align with these uncovered correlations to investment and information?
6.) Can we improve derivative trading software to recognize and exploit information-investment feedback loops?
7.) Can we better track political races by way of information flow-voting models? After all, voting with your dollar for investment is a lot like casting a vote for a candidate and the future.
8.) Can we use social media 'trending' mathematical models as a basis for information-investment course trajectory predictions?

What I'd like you to do is think about all this, and see if you see, what I see here?