Penny Profits
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Investing for Wealth
If you want to invest for wealth, it helps to emulate what the wealthy people do. For those who want to learn the first secret about what millionaires do differently from the rest of the population, you only have to realize they are willing to speculate on riskier investments and they know that the best timing can make them the most money. Many investors make the mistake of buying when stocks are going up and selling when they are going down, but smart investors know it should be the other way around.
This means that wealthy people will try to make penny profits by investing on the hot stocks, when they are at their lowest and sell them when they are nearing their tops. Timing is essential, even if you are only increasing your wealth with penny profits on micro or penny stocks. Obviously a penny stock is not so valuable as a stock with a high share value, but you want to pick this unloved stock before it becomes valuable.
Investment Goals
You should have short-term, mid-term and long-term investment goals. There are many penny stock investors that are day traders, but they also purchase speculative penny stocks, based on research and on the advice of experts who put out newsletters. If you want to become wealthy, the best approach could be a multi-faceted one, but you must constantly be learning, while taking advantage of helpful tools that are available to you and the other people who invest for wealth.
Most investors who hope to become wealthy will already have goals and know what they want, but they may not know how to get it. They are willing to take penny profits and keep building on them, however. If you want to invest for wealth, you should use leverage and this means using smaller amounts of money to control more stock, such as options. These can be complicated investment instruments, unless you have studied their volatility and you are willing to risk your investment. If you do not fully understand the instrument then do not use it. Stick with a simple company stock until you fully understand the alternatives.
For those willing to invest for the short-term, mid-term and long-term, penny stocks can be a perfect solution. There are stock-picking programs that can help you choose the next winners, but there are some people who choose to spread their risk and play the indexes or E.T.F’s, (exchange-traded funds), instead. This can help you spread your risk and you let expert money managers choose the next “hot” penny stock picks. Direct shares are cheaper than the “blue-chip” E.T.F’s and you can still participate in a number of market segments or products.
Exchange Traded Funds
For some people who want to become wealthy, allowing others to choose their investment choices can be helpful, but it is mandatory that you learn to make decisions on your own. While ETF shares have lower costs, buying and selling flexibility, along with market flexibility, tax efficiency and transparency, you should still understand how investments work and learn how to invest for wealth, on your own.
Penny profits may seem like a slow process, but until you have the proper knowledge, there are tools to help you make sound investment decisions and teach you how to invest for wealth. This is where the wealthy investors have learned to convert their penny profits into a large capital cushion that provides them with more income and a better lifestyle.
One final piece of advice, and read this more than once: “do your worrying before you place your bets.” Spend time researching and understanding as much as possible about your planned investment, then consider the likely outcomes. When it becomes time to commit your funds you need to know your investment strategy. Generally for penny stocks it will be a hold and wait strategy with the acceptance of total loss if the stock does not succeed. Don’t kid yourself, some or perhaps many do not succeed. Spend time reducing the risk by selecting very carefully.
Warning: This information is of a general nature and has been prepared without taking into account your objectives, financial situation or needs. Because of this, you should, before acting on the information, consider the appropriateness of the information, having regard to your objectives, financial situation and needs.
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Source by Ronald G Heron
