Trade Alert
May 4th, 2008
The best key to avoid any frauds is investigation before investing in micro-cap stocks, small stocks, Canadian penny stocks, or even US penny stocks. If we were victims of fraudulent sales, it wouldn’t be easy to overcome our problems and difficulties.
Here are some alerts of micro-cap stocks investors must know; those alerts or warning signals show the importance of investigation with confidence.
1) Risks of prices:
The price of a penny stock can drop in value suddenly or become double or even triple in a moment. So penny stock prices have a special nature which we can call speculation.
2) Risks of purchase:
Investors may subject to pressure through the process of buying stocks. If investor didn’t notice that pressure, he/she would fall into trouble with worthless shares that won’t sell again.
3) Risks of selling:
Sometimes micro-cap stock brokerage firms enforce investors to invest the proceeds in other micro-cap stocks in order to execute the sell order which means that investors don’t have the ability to sell their stocks till firms give them the key to complete their process of selling.
4) Risks of loose:
Many investors put all money they have in their investment and that’s not good for them if they lose it. Penny stocks are profitable investments but that doesn’t mean we risk with all money we have. If you can’t afford the loose, then don’t invest from the beginning.
5) Risks of information given:
Information is the most kind of risk investor can face as information reflects the facts of investments. Lack of information about the companies, brokers, and market events leads to increase the risk to the investor. Penny stock investing is difficult without the needed information
6) Risks of yourself (The dangerous one):
Do you know that the enemy of the human is the person himself?! Some investors make hasty decisions after hearing some tips on penny stocks. Those investors become blind. That is because most of them think they make the good decision in the exact time.
We mentioned these kinds of risks in order to make you get the whole picture of penny stock investing. It’s very simple to avoid most of these risks by investigate before start investing.
Each stock had its risks so penny stock investing has its risks and its advantages.
May 7th, 2008 at 6:25 am
[…] the broker to give real-time information about stocks, prices, the current market quotation, and risks in written documents to the investor then obtain a written agreement from investor in order to […]