Intro to penny stocks

Penny stocks often experience dramatic price swings, and often these swings can be contributed to nothing more than a large purchase or sale of stock. It is common to see your shares fall or rise 20% or 50% or more during a trading day, and even return to the original price level by the end of that same day. When a company does come out with a significant press release, for example a biotech company gaining an approval from the FDA for its latest drug release, expect the shares to make a huge spike in price, and potentially rise even higher in price the following few trading days. Price explosions of several hundred percent in a matter of hours or minutes are not uncommon for companies who have penny stocks. Stock markets try to match up the highest bid price and the lowest asking price.

When these numbers match a trade takes place. An example of this is when you see a price quoted as $0.50, you know that the last trade was when a buyer and a seller both agreed upon $0.50 for their transaction.When the bid price and the ask price do not match there is a spread. If the highest bid is $0.90 and the lowest ask is $1.10 the spread between the two will be 20 cents.

You will quickly find that penny stocks are subject to much larger spreads, based on a percentage, than more stocks traded at higher prices. It is quite common to see penny stocks with spreads of 20% to 35% when investors and sellers do not match up on the price.

Analysis of Stock

Technical analysis is an exploration of the trading chart of a certain companies stock to look for trends, patterns, and hopefully predict future increases or decreases in the price. For this examination to work accurately the stock needs to have a high level of trading activity. The high trading volumes in big name investments make technical analysis of the company's trading chart possible and improves the accuracy of those predictions. Penny stocks lack the critical mass of trading volume to enable standard technical analysis. It is more difficult to predict how a penny stock will fluctuate on the market, which makes the risk for return even higher. Penny stocks are considered higher risk than other companies trading at high prices because inexperienced investors have lost money, and quickly.

Technical Analysis Indicators of stocks

These are indicators that assist in predicting stock price direction. Some of these indicators include smooth moving average, bollinger bands, momentum, relative strength index, and others.

Intro to the stock market

In our country there are three stock exchanges that investors can use to purchase and sell shares of different companies. These three exchanges are: Dow Jones, Nasdaq, and S&P 500. Of these three the Dow Jones has the most volume of shares circulating the exchange. Companies such as American Express, Microsoft, Walmart, and Exxon Mobil. The Dow Jones has hit a record high for 2009 in the recent days at around $10,500. Today alone the exchange in total grew 65 points. The Nasdaq trades at around $2,200 and has gone as far down as $1,200 in the past year. Today the Nasdaq Composite fell .55 points. The S&P 500 trades at $1,100 and has ranged from $660 to $1,200. Choosing the right company to invest to can be very difficult with the amount of companies that are available to be sold and bought by the public. Penny stocks are especially difficult to predict because the price could fall very easily or rise 150% or more in only a day.

Making money in a recession

Many people believe that during an economic downturn in our society, it is an impossibility to make money on your investment. This is hardly the case. During this current recession certain industries, but more specifically companies have been booming. Goldman and Sachs, one the largest investment firms in the world showed huge increases in their revenue and stock price. Industires such as gold have also boomed to be over $1100 a share. A few years back a share of gold stock could have been purchased for around $200. If you kept your investment in gold until now, depending on the amount of the investment, you could retire and live comfortably for the rest of your life. This is an easy way to make large sums of money, assuming you make the right choices of companies for your investment.

How penny stocks make people money

When dealing with penny stocks there is a chance that the stock could rise several hundred percent in a short period of time. A lot of stocks in this category are sold for literally half a cent if not less. If the stock goes up to lets say, $.05, that is a huge margin of growth and your investment will grow before your eyes.

Taxes, Taxes, Taxes

Hi all, I know my last blog was pretty intense but I want you to see what I am talking about. After my friend had brought up the information about taxes and penny stocks, I began to research about the validity of the statement. I took the amount of money in which I have currently EARNED, and I have figured out that I will have to pay a rather large amount of taxes as well. It didn't seem right. I calculated it over and over, I invested in my penny stocks, traded for myself, why are they taking this much. I made all the decisions, yet reap minimal reward. I think its ridiculous.
I wish the government who are just "trust-fund babys" themselves, whom only went to the schools they attended and recieved the jobs they did because of who their family knows, could come down to the real world and see that their decisions affect millions of people. Millions of people depend on these figure heads for help and that is nothing but sad. The only way to succeed in todays world is to do for yourself.
Building wealth is not some formula that you can follow or maybe it is? I want you to think about something. More millionaires will be made during this recession then ever before. Do you realize what this means? It means, be on the right side of the spill. Be on the side that buys into the economy and watch your stocks soar to record highs and then when you see that downtrend sell. Houses are down in prices, buy now. When the house market increases, sell! Penny stocks are the best investment, more huge corporations are going to be emerging in the next ten years, taking over the stock market and growing in ridiculous fashion. Google was once a penny stock and now sells within an everyday range of $400-$600. Are you kidding me? $100,000 a year, please, I want One billion! And the funny thing is, if your reading this and saying $100,000 per year is great, you've given up the fight. You could be a millionaire, think about it.