Go to: /articles/2008/11/05/ for other articles.
Buying Penny Stocks The Lazy Investor's Way
Buying Penny Stocks The Lazy Investor's Way Buying penny stocks, although it can be highly profitable, can also be very risky. The amount of risk involved can be significantly lowered by thoroughly researching the stocks you are interested in, but the research can be very difficult and time consuming.
There is a new computer "bot" that has been created that analyzes penny stocks thorough in-depth mathematical analysis and by doing so dramatically decreases the risks and increases the profits from buying penny stocks, while greatly simplifying the work of choosing what stocks to buy and when. Of course, such a system does not come cheaply, but there is an opportunity for even the smallest of investors to reap the benefits of it.
Penny stock investing has big advantages when it comes to large, rapid returns on investment, and the fact that penny stocks are priced low enough for even very small investors to buy stocks and have the opportunity for a diversified portfolio. Because penny stocks have such low values, just a few cents change in the price of the stock can equate to a huge change percentage-wise, and potentially a huge profit to the investor, depending on the amount of the total investment, particularly in comparison to the profits possible with larger value stocks.
To show the power of penny stock price changes, let's do a comparison. If you wanted to invest $1000 and found a stock you decided to buy at $100 per share, if it increases by $1 per share, you'll have made $10. On the other hand, if you invested $1000 in a penny stock that initially sold at $1 per share and it increases by $1 per share, you'll make $1000!
Now, by the same token, penny stocks can lose a bunch of money very quickly too, which is one reason why it is important to be very careful when buying penny stocks. Another reason that penny stock investing is risky is because of shady or outright fraudulent practices of some individuals involved in marketing and selling penny stocks. Because companies that issue penny stocks are not required to file financial reports with the SEC, it can be difficult to obtain reliable information to really assess the stock.
Various unscrupulous tactics may be used to lure unsuspecting investors into buying penny stocks as a ploy to drive up the stock price and then insiders may quickly sell of their stock at a high price. The sell-off drops the stock value sharply and the investors take a big loss. In investing, it is typical that investments with the highest potential returns will also have the highest risk, but in penny stock investing, the high rate of fraud increases the risk well beyond just what is produced by the natural tendencies of the market.
To overcome the risks, buying penny stocks has traditionally required a large investment of time to research stocks to avoid the scams and predict a relatively good rate of return. A careful penny stock investor could spend quite a bit of time evaluating a single stock. This effort would hopefully pay off in the long-run, but the time required in doing this often made penny stock investing out of the question for part time investors.
Then along came "Marl", which is a penny stock buying computer bot designed by a couple of guys that had the unusual combination of computer programming expertise and in-depth understanding of stock investing. Marl has several advantages over human investors, but the biggest advantage Marl has is that there are no emotions involved in his stock picks. Marl makes his picks based on cold, hard, statistical calculations. Plus, Marl can do a detailed analysis of hundreds of stocks in less time than it would take even an expert stock analyst to do a cursory evaluation of just one stock. This doesn't completely eliminate the risks of buying penny stocks, but it does cut down on the risk considerably.
Marl has been so effective that he has allowed for huge gains by advanced investors. Because of this, Marl is considered a bargain at the $28,000 licensing fee, but bargain or not, this is well beyond the means of small investors. There is an option to use Marl that is available to investors with even the smallest of budgets though. The guys that developed Marl put out an e-newsletter that gives Marl's top penny stock pick for each week. For new investors, this might be even better than buying the full Marl program, as it narrows down the investment options to just one stock every week, instead of figuring out what to buy out of hundreds of options. With this, even the most novice of penny stock traders can do well with penny stocks.
Although the inventors of Marl have indicated that they will be limiting their subscriber list to the newsletter and may stop selling new subscriptions in the near future, hopefully they will have compassion for the small investors who need all the help they can get and continue to allow new subscribers long-term. In the meantime, small investors now have an option to dramatically assist them in buying penny stocks.
About the Author:
George Best is a small investor from San Antonio, Texas. To learn more about Marl and how he works, please visit pennystocks4u.com (*Note - There's no www in that URL).
---------- This article is distributed on behalf of the author by SubmitYOURArticle.com SubmitYOURArticle.com is a trading name of Takanomi Limited. Takanomi Limited is a limited company registered in England and Wales. Registered number: 5629683. Registered office: 31 St Saviourgate, York YO1 8NQ. Full contact details are at takanomi.com ----------