Want to spend a little and make a lot? If so, you’re not alone.
Penny-Stock Pat. She invests in the Over-The-Counter (
”
OTC
”
) stock market.
Want to spend a little and make a lot? If so, you’re not alone. Penny-Stock Pat. She invests in the Over-The-Counter (“OTC”) stock market. It’s a market that may offer the opportunity to make as much as ten times or more on a single investment.
Stocks in the Over-The-Counter market are owned by brokerage firms. The market is wide with relatively few regulations and the stocks can rise and fall quickly.
That’s exactly what made Pat become Penny-Stock Pat. She bought 10,000 shares of a stock at 25 cents a share and in a short period of time her investment increased 60 percent when the shares hit 40 cents. Although she had little knowledge of investments in general, Pat turned out to be a good “penny” stock player.
There are definitely obstacles that could prevent the possibility of success. Foremost is the fact that most companies issuing “penny” stocks do so because they’re either just starting out or are struggling to survive. Another obstacle is the commission you must pay. It can be as high as 10 percent to buy and 10 percent to sell. You would need to make a gain of 20 percent just to pay the expenses. Another factor is time. You must be willing to give your investments time to develop and establish themselves.
Penny-Stock Pats can increase their odds of making a profit by conducting disciplined research. After identifying an investment you’re interested in, you should review the company’s annual and quarterly reports.
Bottom-Fisher Bob likes to purchase large-cap, blue-chip companies who have had a stretch of “bad luck.” These shares tend to be very cheap and he believes that since these companies have been around for so long, their risk of going bankrupt is quite low. “Large-cap” refers to companies that have issued a large number of shares and have a high market value.
Several of these Fortune 500 companies encounter some misfortune from time-to-time. Out of these companies, some manage to turn the situation around and make a profitable recovery for investors. Bob located potential turnarounds by searching for stocks with yields above the norm for their industries. Then he would research what created the high yield: either an increase in the dividend while the price of the shares remains unchanged or a decrease in the price of the shares while the dividend remains unchanged.
One thing Bottom-Fisher Bobs have to watch out for is sometimes a company that doesn’t want to cut its dividend in the beginning will end up doing so later when its condition has become even more critical.
Bottom-Fisher Bobs will be more successful if they take the time to research a company’s problems to determine how serious they are. You should also pay some attention to expert opinions. No matter what, you shouldn’t make the entire investment at one time.
You can contact Eric at www.WealthCreator.com or 297-9800.
