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Do Your Penny Stock Research Before You Ask a Penny Stocks Forum

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Penny Stocks Forum

The Good and the Bad of a Penny Stocks Forum

Penny stocks are an often misunderstood stock market investment, and a penny stocks forum can be a hit or miss resource for evaluating share potential. Smart investors will scour the Russell 2000 on a daily basis and have archives of historical reference to draw from anyway. However, with so many opinions readily available on penny stock forums and investment websites, it can take some time before investors find a trustworthy resource. Here are some tips to evaluate forums:

• Uncover their motive for being there. Is this website trying to sell you on their favorite picks? If it seems like there is a lot of sales pitch and little applicable information, move on.

• Spam. It should go without saying, but if a forum’s moderator allows spammers to post on a regular basis, they do not deserve your attention.

• Daily updates. Assuming you trade on a daily basis, or at least dedicate a respectable time to studying the market daily, you need daily insights. If the last forum post on a penny stocks forum is from last year, it’s a good bet the information there is suspect.

• There are many good forums with experienced members, but the ultimate test is the return on your investment. How do forum recommendations hold up in real time trades? It is important to perform due diligence on any investment advice before committing money, of course, but this is still an important consideration.

Marks of a Good Penny Stocks Forum

It is important to differentiate between a forum pushing a commercial agenda and one allowing regular contributors to post detailed and informed stock recommendations. In fact, a good mark of many forums, and a reason many people are members, are the detailed company posts. These posts will contain company contact information, ticker symbols, share structure information and a general synopsis of the business. These company “outlines” give individual investors a place to start their own research. Of course, once they have, they are likely to share this information on the penny stocks forum.

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