| The stock market is not a child's play and, moreover | | | | within this market. Stocks can crash and stocks can |
| if you, as an investor, look toward personal gains | | | | also climb in value without any warning. Predictions on |
| from stocks, then, you need to segregate between | | | | movement are possible but guaranteeing |
| types of stocks available in the market as it shall be | | | | performance is almost impossible. If your gut tells |
| well worth your time. There are several good penny | | | | you a company is worth investing in, proceed, but do |
| stocks available, which could quickly turn a small | | | | not buy into someone else's assurance on |
| amount of money into a small fortune. First of all, | | | | performance because this "someone" would either be |
| you need to perform a good research from well | | | | a broker who anyways stands to gain from your buy |
| known sources as it helps in investing "smartly". | | | | or could be a promoter himself. Base your decision |
| There are a few penny stocks which you should | | | | after thinking about various other stocks and also |
| avoid buying. Some of them are as follows: | | | | watching the movement in the market. |
| 1) A tele-stock-seller: A tele-stock seller is basically a | | | | Tip: Always remember that nothing is "guaranteed" in |
| call centre executive (in most cases) who is paid a | | | | a stock market. This is what makes the industry a |
| commission based on the number of deals he or she | | | | hotbed of financial eruptions. |
| finalizes. It is definitely not in your personal gain, but | | | | 4) Sinking ships: Just because a stock costs less, it |
| in his. A sound company would ideally not resort to a | | | | doesn't mean that it is a good bargain; remember |
| tele-sale tactic to clinch a deal. | | | | that this isn't a FMCG environment. There is no |
| Tip - You must always use a stock news channel to | | | | guarantee that a stock's value which has dropped will |
| know about worthy stocks instead of a tele-caller's | | | | go high after a while. It's possible that it can go lower |
| advice. | | | | too, so, ideally, it isn't the best way to choose a |
| 2) The hot-tip stock: Rumors have a very low | | | | stock. |
| percentage of actual truth in them. If word there is a | | | | Tip: A sinking ship would ideally drown and may not |
| word about a possible stock going high in value then, | | | | float back up. |
| there are chances that this hot-tip is just a rumor | | | | 5) Commission Free: If you want to buy stocks, |
| which has been started by a promoter or a non | | | | commission free then there are chances that you are |
| professional investor who wants to throw the gentry | | | | anyways being charged a hidden commission via |
| off-track. As a matter of fact, it is hard to predict | | | | higher bid prices or by buying on the actual bid price |
| which stock would appreciate or depreciate, only | | | | based on a broker's valuation. |
| constant watch on stock movement can help one | | | | 6) Warrants & Rights: These fail to qualify as stocks |
| judge or perhaps faintly predict price movement, on | | | | and are actually derivatives, but these can be |
| the whole, it takes years of experience to even | | | | confused as stocks because they get listed on stock |
| judge this part well. | | | | sites and are traded for pennies. |
| Tip: You should make your decision on the basis of | | | | Tip: Keep attentive when buying stocks to make |
| actual printed information on paper and not on | | | | sure that they aren't actually disguised derivatives. |
| rumors. | | | | One should be careful, purchasing the above |
| 3) Guaranteed performance: The stock market is | | | | mentioned penny stocks as they may lead to great |
| known to be volatile. Nothing is ever guaranteed | | | | loss rather than any profit. |