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.

Where Is My Money? No, But Seriously?

Now I know I posted about how you can utilize penny stocks to ensure wealth before, yet I want to share a discussion I had with my friend the other day. Now I am a kid who grew up with little, my father worked a normal job alongside my mother probably clearing, after taxes, $90,000, and I know the value of a dollar. My friend on the other hand is a "trust-fund baby". So we were talking and he invested 25,000 dollars within a couple of penny stocks, me, I started small. One of the penny stocks in which we invested in sky rocketed. It went up 120%, making him around 30,000 and he started to complain about how much money he was going to have to give up for taxes. Now as we started getting into it he started talking about how he earned it in a "free-market capitalist system", "why should I give the money to the government if I earned it", he told me. And me being a kid who didn't have much growing up in a family of five coming from the Ukraine started to think about it. It doesn't make sense. Why? I came here to make money, to strive to be at the top of an empire in which I built just as past great Americans did, to name one Rockefellar. He was a free-market capatilast and built this country. He gave us the industrial revolution. Now what are we?
Socialist! The government becomes involvd with any issue. They make taxes which are erronious especially withion richer areas. Oh yeah, you can work for the dream, but be aware of the consequences in which ensue. Higher income taxes, property taxes, capital gains taxes, and be preapared for the coming of the end of social security. This is a government run agaency that could barely handle running the post office before they had to make it a civil job when they incurred "complications". And now they want to run my health care, a little fishy to me. Would you hire the worst company you saw because their price is cheaper, if so, choose the government for this position because their system will turn just as social security did, and the postal service. See a trend, if you were watching a stock performing like our government, you would sell and be concerned about how much money you had lost and what made you think of this terrible investment.

Penny Stocks Build Wealth

All right, so everyone wants to get rich, but how? I know what your thinking. I am young, I have to pay for college, I have bills, I can't possibly get rich this young, can I? The answer is yes, but maybe not like Bill Gates but you can absolutely lay the pavement for a smooth road ahead instead of a rocky trail.It has been proven by many that the best way to make money, is let your money work for you, not you work for your money. I know you all have seen it personally some how, some common guy with a common job working from paycheck to paycheck when the more hours he works it seems like the less he is getting. I look at these people and realize that hard work is not the answer, I would never want to work half as hard as my father for even double the money he was making.
Penny stocks are the answer to some people, mostly young. It requires minimal investment, it will let you see how the market works, and may even give you that wealth in which I described. The percentage change in stock price is drastic within penny stocks, and it is not uncommon to see 100% changes on certain hot penny stocks. If one invested 10,000 dollars right now within the stock market, especially while it has been suffering 10,000 dollars if their stock went from one cent to two cents. With the knowledge one can obtain through this experience, one should gain enough experience with investing to feel comfortable to roll the dice with larger more risky investments such as stocks, bonds, etc.. Don't be too excited if you start to make money, the government may take a larger chunk from your gains than you think, but i'll talk about this within my next blog.

More About Me

Once I had a vague understanding of the stock market I purchased Warren Buffett’s biography. In this book the author elaborated how Buffett made his first stock purchases, along with how he decided to invest a significant portion of his savings in the credit card industry when his colleagues advised against it, etc. Buffett’s decision making intrigued me so I decided to research information on certain companies and see if what they did on the news affected their stocks. was incredible how the two were interrelated.