Penny Stocks can be defined as stocks trading under $5.00 These stocks offer the potential for huge profits as small moves can equal large percentages. Penny Stock websites all over the internet promote penny stocks as a way to get rich making a windfall seemingly overnight, while this may be true some of the time, more often than not many investors lose large portions of their investments when penny stocks tumble downward as many of them do. Some is always left holding the bag.
Our approach is different, we recommend taking small consistent profits rather than always chasing after some once in a million shot that leaves the average investor with losing trades time after time. Penny stocks do not just magically increase in value; there is always a logical explanation as to why these unknown stocks begin to skyrocket. While some of the time it may be because of a new patent, breakthrough technology, contract acquisition or new discovery, many times it is because the stock is being heavily promoted.
There are a multitude of companies that are paid thousands and thousands of dollars to increase exposure for a little known stock. You may be familiar with these types of companies as you have probably received some of their correspondence in the mail or electronically in your email box. They tout the amazing deal they have discovered and how they have been researching it for months, when in reality they have been paid to say that. Just read the disclaimer. The SEC requires that they disclose exactly how much money they have been paid to try to convince you to buy and hold this stock. This is where many investors get caught up. This stock may or may not increase the hundreds of percent they claim it is going to increase but you can not be sure.
One thing you can be sure of however is that all this money they have spent on promoting this little known stock will result in a surge of interest and a spike in the stock’s price. This is where we feel money can be made! These surges sometimes only last a day or two so time is of the essence. We monitor the major stock promoters to look for stocks that are being heavily promoted and when we say heavily we don’t mean by one or two rinky dink agencies we mean a major push, at a cost of sometimes hundreds of thousands of dollars. Companies don’t spend that kind of money on promotion efforts and not expect results. Those results equal surges in the stock price. Surges that can allow you to take safe, moderate profits. Since there are stocks promoted every day, you can do this day after day. Profits based on paid promotions, time and time again.
