Stock Investment Strategy – Are Penny Stocks Right For You?

Penny stocks are named based on literal as well as perceived value. Penny stocks aren’t always valued at a penny per share. Some may be as high as a dollar. Many people shy away from them because they appear to offer the lure of getting something for nothing. If the amount of money that you have available for stock trading is limited investing in penny stocks could be a smart stock investment strategy for you.

For example, the recent closing price for Google was $438.77 per share. To purchase 100 shares you would need over $43,000 available. If Google went to $440.77 per share your total earnings on your $43,877 investment would be a mere $200 or a 0.4% return on investment.

On the other hand if you purchased 1000 shares of a stock at 10¢ per share, and that stock went to 15¢ per share, your $100 becomes $150 or a cool 50% profit. If that 10¢ stock instead went to a dollar or even $10.00 per share, your earnings would look awesome indeed. You do the math.

Penny stocks often have extremely high trading volumes. When an investor can buy such a huge number of shares with $1,000 or $10,000, it can leave the volume patterns for a penny stock looking similar to one of the S&P 500. This high trading volume can also lead to very high volatility. A stock may reach an all time high and stay there for only minutes.

As with any stock, you should always do your own homework and trading experts seem to agree that if you do trade penny stocks you should probably do that homework twice. Know the profitability of the company. Be very aware of the trends associated with this stock and its industry. Make a game plan and stick to it. Buy a stock only at the price you intended to buy it and sell it at the price you intended to sell it, always protecting yourself with a stop loss order to prevent you from losing everything if the price happens to crash.

As always, never ever let emotion enter into your trade. For some people, penny stocks offer the same excitement as of nickel slot machine. And many of these people walk away from penny stocks as broke as when they leave those nickel slot machines.

I tend to receive a lot of e-mail stock tips about penny stocks. I have never purchased a stock based on one of these tips alone. There were a couple of times when I looked into the company and it appeared that I could make a solid trade. However, my buy price never came around so I didn’t buy the stock.

As part of your all overall stock investment strategy you may want to consider putting some of your investment money into penny stocks. Keep the amount of money limited-not more than 10% of your total trading cash-and look over every stock trading opportunity with a fine toothed comb. As you develop skill and experience as a stock trader you will come to know the fact that the deal of the century tends to come up several times a day. You just have to know how to find it.

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Investment Strategy: The Investor’s Creed

Fascinating, isn’t it, this stock market of ours, with its unpredictability, promise, and unscripted daily drama! But individual investors are even more interesting. We’ve become the product of a media driven culture that must have reasons, predictability, blame, scapegoats, and even that four-letter word, certainty. We are a culture of investors where hindsight is rapidly replacing the reality-based foresight that once was flowing in our now real-time veins… just like downhill racing, grouse hunting, and Super Bowls.

The Stock Market is a dynamic place where investors can consistently make reasonable returns on their capital if they comply with the basic principles of the endeavor AND if they don’t measure their progress too frequently with irrelevant measuring devices. The classic investment strategy is so simple and so trite that most investors dismiss it routinely and move on in their search for the holy investment grail(s): a stock market that only rises and a bond market capable of paying higher interest rates at stable or higher prices! Just not going to happen…

This is mythology, not investing. Investors who grasp the realities of these wonderful marketplaces recognize the opportunities and embrace them with an understanding that goes beyond the media hype and side show performance enhancement barkers. Simply put, when investment grade securities rise in price [As they are now, with the DJIA finally putting together a successful attack on the 11,000 barrier], Take Your Profits, because that’s the purpose of investing in the stock market! On the flip side (and there has always been a flip side, more commonly dreaded as a “correction”), replenish your portfolio inventory with investment grade securities. Yes, even some that you may have just sold days or weeks ago during the rally. This is much more than an oversimplification; it is a long-term (a year or two is not long term.) strategy that succeeds… cycle, after cycle, after cycle. Sounds an awful lot like Buy Low/Sell High doesn’t it? Obviously, Wall Street can’t let you know that it is quite so simple!

[Note that Dow Jones 11,000 was last breached during the infancy of this century, and that the last All Time High in this much too widely followed average occurred late in 1999. When the DJIA banner is repositioned on that historical peak of 11,700 or so, it will represent no less than six years of zero growth in this, the most respected, of all Market Indicators! Would the media strip the gold medal from this Stock Market Icon if it knew that during these same years: (1) There have been significantly more stocks rising in price on a daily basis than moving lower. In fact, more than two-thirds of the last 68 months have been positive. (2) Since April 2000, there have been 120 more positive days in NYSE issue breadth than negative days. (3) 250% more NYSE stocks established new high price levels than new lows. (4) We are working on our sixth consecutive year of positive issue breadth!]

So understand that your portfolio statement values will rise and fall throughout time, and rather than rejoice or cry, you should be taking actions that will enhance your “Working Capital” and the ability of your portfolio to accomplish your long term goals and objectives. Through the simple application of a few easy to memorize rules, you can plot a course to an investment portfolio that regularly achieves higher highs and (much more importantly), higher lows! Left to its own devices, like the DJIA for example, an unmanaged portfolio is likely to have long periods of unproductive sideways motion. You can ill afford to travel six years at a break even pace, and it is foolish, even irresponsible, to expect any unmanaged or passively directed approach to be in sync with your personal financial needs.

Five simple concepts of Asset Allocation, Investment Strategy, and Psychology are summed up quite nicely in what I call “The Investor’s Creed”:

(1) My intention is to be fully invested in accordance with my planned equity/fixed income asset allocation. (2) On the other hand, every security I own is for sale, and every security I own generates some form of cash flow that cannot be reinvested immediately. (3) I am happy when my cash position is nearly 0% because all of my money is then working as hard as it possibly can to meet my objectives. (4) But, I am ecstatic when my cash position approaches 100% because that means I’ve sold everything at a profit, and that I am in a position to (5) take advantage of any new investment opportunities (that fit my guidelines) as soon as I become aware of them.

If you are managing your portfolio properly, your cash position has been rising lately, as you take profits on the securities you purchased when prices were falling just a few months ago… and (this is a big and) you could well be chock full of cash well before the market blows the whistle on its advance! Yes, if you are going about the investment process properly, you will be swimming in cash at about the same time Wall Street discovers the rally and starts encouraging people to weight their portfolios more heavily into stocks; the number of IPOs coming to market starts to rise exponentially; morning drive radio DJ’s start to laugh about their stock market successes; and all of your friends start to talk about their new investment guru or the 30% gains in their growth Mutual Funds. What are you doing in cash!

This is what I call “smart” cash, because it represents realized profits, interest, and dividends that are just catching a breather on the bench after a scoring drive. As the gains compound at money market rates, the disciplined coach looks for sure signs of investor greed in the market place: fixed income prices fall as speculators abandon their long term goals and reach for the new investment stars that are sure to propel equity prices ever higher, boring investment grade equities fall in price as well because it now clear [for the scadieighth (sic) time] that the market will never fall again… particularly NASDAQ, which could double and still not be where it was six years ago. And the beat goes on, cycle after cycle, generation after generation. What do you think; will today’s coaches be any smarter than those of the late nineties? Have they learned that it is the very strength of a rising market that proves to be its greatest weakness!

What Makes Land Banking the Excellent Investment Strategy?

One should really have a decent portfolio to have a better future. Your portfolio should have at least one house property, land, precious stones and metals, bonds, etc. But having a property of land will surely prove best for one’s wealth building plan and retirement plan.

So, here are some great land banking strategies one can use for their retirement plans and for building their wealth but, before that we will have a small understanding of what actually it means.

Land banking is a method of buying huge parcels of pre-developed land and then waiting for it to raise its value in future. Land bank process needs lots of patience as the value of land increases gradually.

So, what makes it the excellent investment strategy?

Setting-up Stage: It includes submitting ideas plans to the authorities to get the correct planning authorization. By way of proper planning one can fetch huge amount of future gains.

Growth Stage: Once you are done with the setting-up stage, you can now start buying of more pieces of pre-developed land provided the amount of money you have in your pocket. The more you gather the more you gain. So, buy more hold it and see amazing gains is the whole idea of this stage.

Giving-out Stage: When you are closing on your retirement, you should develop a smart selling-out strategy so that you will be able to fetch all your future goals and other plans. The main aim is to sell-out your property to the best end-user like commercial or residential developer, broker or someone from whom your will get the best price for your years of hold. If this stage works out well then you will get tremendous appreciation for your land.

This way land banking investments proves to be an excellent investment strategy. If it is done in a right manner, it has the potential to return higher-than-average investment gains in the long term. It offers highest returns with a very low risk involved. Find out a reliable real estate company like Ace Capital Group and benefit from the best investment strategic plan.