Avoiding Penny Stocks – How to Avoid Being Run Over by Penny Stocks Newsletters
As I have said before in other articles, I am not a huge fan of penny stocks newsletters. However, some people do find them useful and effective for their investment purposes. If you are one of these people, then I suggest that you take a look at this article for a few reasons why I do not think newsletters are the best way to go about picking which penny stocks to invest in. Hopefully by the time you finish reading this, you will have a better idea on how to determine which stocks are right for you.
The first thing that makes penny stocks newsletters ineffective for picking success is that most of them do not include a lot of information. Even the more reputable newsletters will usually only give you a handful of picks in a particular market. This limits your selection and makes it harder for you to determine if a stock is worth buying or not. You will mostly be exposed to the information that the person who is writing the newsletter has gathered from studying trends in the stock market.
Also, penny stocks newsletters that tell you to pick one stock out of the bunch to start with is not always the best advice. There are reasons for this. First, the information they give you may not be true. They could have just accumulated data from hundreds of investors, and base the information on that. If that is the case, then their picks may be very risky and useless.
The other issue is that even if the picks they give you are good, there is no guarantee that the company that you picked will still be around in a year from now. Some people pick companies that have big futures and are not around today. There are a lot of examples of people doing this, but it does not pay to be one of them. You may have missed out on big money. There is also no proof that the picks that the newsletter gives you are the best.
Penny stock newsletters often give you data on penny stocks that you should avoid. These picks are mostly bad or misunderstood. Just because the person behind the newsletter says that a stock is worth buying does not mean that the stock is really worth buying. This happens all the time. They get excited about a new stock, hype up the hype, and sell their picks before anyone can have a real look at the business.
Make sure that you are not falling victim to a penny stocks newsletters hype by checking out the source of the picks. See if it is a reputable company and see if it is trustworthy. Check out their history as well. If the newsletter has been around for quite some time, then it is probably reliable. If not, keep looking and do not allow yourself to be influenced by anything that anyone sends you.