Penny Stock Brokers 4u

You may be expecting to find a list here of the perfectly chosen top ten penny stocks to add to your portfolio; sorry to disappoint you but given the fast changing nature of penny stocks, any list that I could compile, regardless of how perfect it was, would be antiquated almost immediately. That said, what is really important is what to look for when putting together your own list of top 10 penny stocks or where you can turn to for up-to-date professionally chosen penny stock picks.

We learn about history in school because the best way to forecast the future is to look at the mistakes and achievements of the past. The same can be true when attempting to forecast which penny stocks will show gains. Although not always the case, sometimes if you invest in those shares that have been performing well so far, you may be able to see some continued gains. For this reason, websites such as Penny Sleuth’s section on the top 10 gaining penny stocks for 2010 may be a good place to do some research.  Found online is a list they have compiled as well as pertinent information about these shares including their symbol and on which exchange they are being traded. While top performers do not always have any more upward mobility remaining, you may still get an idea of which industries are hot at the moment and perhaps spot some trends.

Another option is to research those stocks that other people are finding interesting. You can get some ideas on this by reviewing such things as forums and online communities. One place to read up on various securities is ValueWiki.  From their main page you can select an option to view various Top 10 Lists including one for top rated penny stocks.  This list is compiled through a voting system by ValueWiki users so keep in mind it is not decided by professionals for the most part, although many of the users may be quite experienced. Besides a number of useful features, the site also has community message boards and a chat feature so that you can communicate with other investors.

There are also a number of companies that provide weekly newsletters listing those penny stocks they anticipate being what they call “tomorrow’s movers.” Some of these companies provide their services free of charge while others will cost you either a one-time or ongoing membership fee. One that is currently posting their choices on their website and will email you a weekly newsletter free of charge is The Stock Wizards. They include hot stocks, industry news, penny stock information, videos, a weekly top 10 and articles as well as a ticker tape floating across the top of the screen on which you can click on the symbols to get detailed information about that company.

You can also review what the major financial sites are listing in their top-rated stock lists. For example, MSN Money lists their choices for top-rated stocks with drop-down options to choose small cap and micro cap stocks. While many of the ones they list are not technically penny stocks because they have prices higher than the generally accepted limit of $5 per share, there are still some low priced ones on the lists. You can also use sites like this to do additional research on stocks that you may find listed elsewhere to see how they rate them and if they have more information about the company.

Regardless of where you obtain information about good penny stock picks, you should follow a few essential pieces of advice:

• First, choose a broker carefully – consider commissions, fees, minimums, reliability and other factors before settling on which brokerage to handle your penny stock transactions. You may even find that you would benefit by using a different broker for this part of your portfolio than you use for the rest of it.
• Second, allocate only a small share of your portfolio to this type of investment. Most experts agree that you should not put more than 5% of your overall wealth into this volatile high-risk option. The bottom line is that you should never consider investing more than you can afford to lose. Later if you have some profits, you can continue investing those or shift them back into your other holdings.
• Third, research each stock before you actually purchase it. Analyze the company for consistent cash generation, compare price per share against book value per share, confirm legitimacy of the company and other factors to be sure it is not a scam and its price is not being unduly  manipulated. This is especially true with stocks that are listed on a newsletter which could result in many investors purchasing it at once which will drive the price up quicker than would otherwise be the case.
• Fourth, stay on top of it once you purchase it. It is easy to get complacent when the price stays level for days or even weeks, but just when your back is turned it could start moving and you will either miss the opportunity to sell at the top price or not catch it when it is falling. Because this type of investment takes more attention than others, it is also a good idea not to buy too many different offerings at one time unless you have enough time to monitor all of them.
• Finally, do not get greedy! Set your goals beforehand and stick to them. If you bought it at $1 and set a sales goal of $2, then don’t start second guessing yourself and playing the “what if” game expecting it to double your money yet again unless you have extremely reliable information that would indicate that there is plenty of upward mobility left to capture. Chances are, however, unless there is huge news in that industry or within that company, the information you relied upon to set your initial goal will win out in the end.

The world of penny stock trading can be an exciting one filled with fast profits and amazing results, but it can just as easily be a disaster. While staying on top of things and doing your homework can better your chances, just as gambler knows, the house can win!