| There are two schools of thought that attempt to | | | | information is available in numerous sources including |
| determine when the best time it is to buy penny | | | | the Internet. However, be careful about this. Online |
| stock, and these are the Fundamental Analysis School | | | | services don't necessarily tell you the best time to |
| and the Technical Analysis School. If you go with the | | | | buy penny stock, but they can be used as guides |
| first one, you will likely not focus much on the stock's | | | | and a way to keep updated. The more you know, |
| current price. Rather, you would concentrate on | | | | the more experienced you are and therefore better |
| products and profitability. | | | | at analyzing and predicting the market. |
| Basically, you would focus on the comparative | | | | By viewing a company's financial reports made to the |
| strength and profitability of the company against | | | | SEC, you can measure their financial value. You should |
| competitors. Conversely, those who follow the | | | | be able to catch on important trends and |
| Technical Analysis School of thought don't focus on | | | | weaknesses. Current news is essential to your |
| analyst statements and the historic numbers in | | | | decision regarding the future of that company and in |
| reports made to the SEC. Instead, they tend to | | | | fact has a considerable effect on most companies. |
| focus on the current stock price. Actually, both are | | | | Immerse yourself in what analysts are saying about a |
| legitimate ways to a successful investment. It's all in | | | | particular company. Check if they are good or bad, |
| a matter of having the right approach to your | | | | and how many of them are observing the stock. You |
| investment. | | | | should even see to it if these analysts have actually |
| For beginners, get to know the trend. Look at the | | | | changed their ratings in the long run. |
| direction at which a stock is heading. For instance, | | | | Considering the nature of the micro cap companies, |
| has it been continuously going up or steady? It is said | | | | gaining positive returns is highly speculative and |
| that a stock will likely continue in the same direction it | | | | investing in penny stock carries a high level of risk. |
| is presently following, so if you analyze a historical | | | | Online investment brokers or advisers may provide |
| chart and notice that the stock price in the long run | | | | hot penny stock picks, but if you were to buy penny |
| tends to rise, you lean towards it. On the other hand, | | | | stock using their services such recommendations |
| a downtrend would be viewed negatively. | | | | should be used only as a guide. |
| This is where you need more information. Inside | | | | |