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I am considering making a small initial investment of about 1k into a few stocks. I have an emergency fund set aside and if I don't do well, it won't "break the bank."
I am interested in making some investments in companies that have once experienced high stock prices, but are down now. Some of the companies that I am considering (for now) are C, MGM, and several companies in the solar industry.
Is it a good stategy to bet that companies that have done well (before this economy) will eventually recover as opposed to them going BK or something similar? What do you think about the stocks I have chosen? After watching Mad Money today, MIPS looks promising. Any advise is appreciated!
I know a little bit about Cramer. He is a crook. I'll get more on that later. I don't think he has a conscience at all.
I have a few stocks, myself. The two that look best are XMDC and HMIT (soon to be VMGI.) If you can hold a month or so, be prepared to sell some of those shares for a nice profit.
It's quality, not the quantity. $1000 investment still a $1000 investment regardless how many share you have. If you believe that more share mean better, by all mean, get some penny, I meant selling for pennies, and you can have so many shares.
You can get some very impressive leverage with penny stocks. Also, I'd strongly suggest a board like Ihub. It can be a big help. Here is one I frequent.
I am considering making a small initial investment of about 1k into a few stocks. I have an emergency fund set aside and if I don't do well, it won't "break the bank."
I am interested in making some investments in companies that have once experienced high stock prices, but are down now. Some of the companies that I am considering (for now) are C, MGM, and several companies in the solar industry.
Is it a good stategy to bet that companies that have done well (before this economy) will eventually recover as opposed to them going BK or something similar? What do you think about the stocks I have chosen? After watching Mad Money today, MIPS looks promising. Any advise is appreciated!
It's not a good strategy in my opinion. Companies that once were sky high and now worth pennies are extremely risky especially if they have high volume along the downtrend. This means it had a huge sell off and the people who are left are the emotional public. The "strong" hands sold off along the way down. Look at GM, CIT etc right before they went bankrupt, huge volume. There is a strategy where you buy cheap stocks that were once high, but it's an entirely different thing that shouldn't be used by first timers. MGM isn't as risky as C or SIRI etc, but it's still risky. If you want to invest in Las Vegas and are willing to take the risk for possible large gains, MGM is probably your best bet. However, make sure you don't need that money. Also... If you only have $1000, don't buy numerous stocks. Buy one or two MAX! You have to pay commission when you buy and sell, so if you only buy $250, the stock has to go up quite a bit just to break even from commission.
You can get some very impressive leverage with penny stocks. Also, I'd strongly suggest a board like Ihub. It can be a big help. Here is one I frequent.
I heard that it can be hard to sell penny stocks. How does that work with online brokers like Scottrade?
I made the mistake of using Wells Fargo for my online program. It was very well suited for blue chip stuff (even had a number of free trades), but not for pennies. I'm getting hit hard with fees, so I'm going to Ameritrade. But yeah, it's very easy, unless you chose a stock that has no bid, or has very little in the way of trade volume. BTW, I',m not a trader, I just choose my stocks and sit on them until they produce, though there are exceptions. For example, I may decide a particular stock looks weaker than I thought, I may sell the entire investment in that stock and buy in somewhere else. But that is pretty rare for me.
I usually recommend that people use a well-used board like IHub, which to me is a big help. There are a lot of experienced people in many stocks, though some have more than others. The farther a stock is under the radar, the less experience you'll see.
The only thing I had to get used to was the program. Not to mention little things like punching in 8000000 instead of 8,000,000, which can throw you a curve. And you may like to set up a sell ahead of time in case it hits a certain pps. I like to have a little money from my investment and hold the rest until it matures more. That can take months (if you are lucky) to a year, at least.
Sorry, I get carried away sometimes.
Oh yeah, I have had some experience with a brokerage. The brokerage management tended to have strong feelings about penny stocks and try to dissuade their brokers from buying for people like me. That's when I moved everything out and became my own, self-directed buyer-seller.
I heard that it can be hard to sell penny stocks. How does that work with online brokers like Scottrade?
If Scottrade is worried that a certain stock would be difficult to sell, they will require you to call your branch to make the transaction. It doesn't cost any extra, it just requires you to call them. The important thing to look for is the difference between the bid and ask price compared to the current stock price. Most people who buy penny stocks lose money though. Read Ted Warren if you want to make big bucks from cheap stocks.
a small inititial investment into stocks isnt an investment.its a speculation.. basically your hoping you pick just the right company at just the right time in just the right sector in just the right market sentiment , assuming you guessed right on the above you now have to guess right about the competitors and what they are doing.
put it all in a diversified mutual fund and at least take the individual company risk out of the equation.
If Scottrade is worried that a certain stock would be difficult to sell, they will require you to call your branch to make the transaction. It doesn't cost any extra, it just requires you to call them. The important thing to look for is the difference between the bid and ask price compared to the current stock price. Most people who buy penny stocks lose money though. Read Ted Warren if you want to make big bucks from cheap stocks.
I think it's very helpful to sell some stocks in a run. This way, you have free shares and it takes out the risk factor. If you believe in the company, stay with it. Once you've sold shares, you can buy back in at a lower price. I've agree that knowing more about charts is a big help. I've picked up some of it and am still learning, but I admit to being a bit lazy. On good stocks, there are usually people who know charts.
I made the mistake of using Wells Fargo for my online program. It was very well suited for blue chip stuff (even had a number of free trades), but not for pennies. I'm getting hit hard with fees, so I'm going to Ameritrade. But yeah, it's very easy, unless you chose a stock that has no bid, or has very little in the way of trade volume. BTW, I',m not a trader, I just choose my stocks and sit on them until they produce, though there are exceptions. For example, I may decide a particular stock looks weaker than I thought, I may sell the entire investment in that stock and buy in somewhere else. But that is pretty rare for me.
I usually recommend that people use a well-used board like IHub, which to me is a big help. There are a lot of experienced people in many stocks, though some have more than others. The farther a stock is under the radar, the less experience you'll see.
The only thing I had to get used to was the program. Not to mention little things like punching in 8000000 instead of 8,000,000, which can throw you a curve. And you may like to set up a sell ahead of time in case it hits a certain pps. I like to have a little money from my investment and hold the rest until it matures more. That can take months (if you are lucky) to a year, at least.
Sorry, I get carried away sometimes.
Oh yeah, I have had some experience with a brokerage. The brokerage management tended to have strong feelings about penny stocks and try to dissuade their brokers from buying for people like me. That's when I moved everything out and became my own, self-directed buyer-seller.
Just curious as I was considering WF for the free trades. What kind of fees do you get hit with?
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