Posted on 13 December 2011.
Many people come into the penny stock markets and disregard the idea of long term penny stocks. They are focused on earning fast money by making multiple trades per day and shrewdly buying and selling a different stock every few minutes. This is a good way to destroy your chances of making money in penny stocks. While there are times when people can make money in a matter of minutes, the wisest investments, and the most common, are in long term penny stocks.
Much of the time, investors with their money in penny stocks are waiting for an upward trend that they feel is likely due to past performance and other factors, which may drive up prices. However, these influences often take time to develop. They are usually not changes that occur over the course of a few minutes or an hour.
Holding on to penny stocks for a longer period of time ensures that you will get everything that you can out of them. Selling stock just moments after it makes a brief surge in price limits your ability to profit from its improvement. If you have really done your homework, then you probably invested in a company that you felt was sure to break out of the penny stock cellar and return to stability and prosperity again. This will not happen overnight.
If you want to make money in penny stocks, long term is the way to go. This gives you maximum opportunity to reap all the possible profits from a company’s rehabilitation. Holding long term penny stocks also helps to keep you from over trading, which can hurt you with fees and cause you to miss out on the real profits.
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