What is a Penny Stock?
A Penny Stock is a stock whose shares trade for less than $5. These stocks are a bit risky to invest in, but also have the potential to generate huge gains.

What are some of the Dangers?
One of the greatest dangers of penny stocks is their lack of visibility. Because most of these companies are newly established or small, there is less information about them. This fact requires you to make decisions based on limited information compared to what is available for larger, more established companies in major stock markets. Another great risk is that these stocks can sometimes trade slowly from low liquidity, making it difficult to cash out on your investment.

What are the positives?
By its nature, a penny stock has a lot of potential. That is to say, it has a lot of potential to move either up, down or disappear completely. That being said, there is much more potential for growth than there is for loss. As a result, a good penny stock pick can reap huge returns and give a nice boost to your investment portfolio.

What else should I keep in mind?
Even some of the top penny stocks to buy are not quick, easy money. Despite what anybody tells you, these stocks require great care and educated investment. You should take into account that these shares trade slower than larger shares. Many of the companies selling these penny stocks have high debt loads and are selling stocks to reinvest into the growth of their companies.

Some of this may sound scary. However, with the correct knowledge and prudence, penny stocks can not only be profitable but enjoyable to trade. There is a certain rush that you get from trading in a volatile environment. You also have the opportunity to be part of a someday great company. Many of our largest technology firms were funded in this way. With the correct penny stock guide, you could be well on your way to taking part in the next big venture.

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There is a popular saying among rich people and that it isn’t about the money they make but it’s more about the money they keep. This is actually profound advice if you consider that so many people invest in the stock market hoping for fast money without any savings to their name. Having money in the bank will definitely help in influencing you NOT to sell in rough times.

When people are investing, they should think about investing for the future with long-term stock picks. This is for a few reasons. Hopefully, you’re able to spot some growth stock picks that will be worth more in the future and it takes time for a company to build. Given the time you need to wait, they should be selling at a value price.

Other reasons to invest in the long term include just not triggering so many commission fees with buying and selling transactions like a lot of traders do. This eats away at your initial investment and like stated above, being rich is about the money you get to keep. While day trading might seem glamorous and there’s no doubt that you can make a lot of money fast, you can also lose it as quickly as the money came in.

One of the rules of investing from the famed investor Warren Buffett is to never lose your money. And given his track record of being a billionaire stock picker, who can argue with him? It takes discipline not to invest in losers and that is why Buffett is known to hold billions of dollars in cash. Going in and out of trades and being forced to make decisions when you don’t have money is not a good way to invest. If you want to be rich investing, you need to your money to pounce on opportunities when they do come along.

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Many online brokers are available, but no two are alike. Many of them advertise on other websites, and have such pitch lines as: 100 free trades, 4 dollar trades, and $1.95 options contracts. These sells lines are good for drawing business in, but they do not tell the whole story. For instance, the 4 dollar trades line is the headline of many sharebuilder or ing direct ads. This company does in fact offer 4 dollar trades but only if they are not real time trades. Real time trades, which are trades executed the moment you place them, run a standard rate of $9.95 on sharebuilder.

Also, anytime you sell your position on sharebuilder, you will be charged the base rate of $9.95. The 4 dollar rate applies to trade that are made in advance or set up to occur in the future. When trading in this manner, you may not get the stock at the price you want. However, overall sharebuilder is a fine site for the beginning investor or infrequent trader.

Other online investment sites such as e-trade.com are better geared towards the more experienced trader. The technology behind e-trade is for those who understand advanced Wall Street jargon. E-trade is also designed in general to be used by day traders, or those who trade in and out of stocks on a very frequent basis. They are the site well known for ads reading “100 free trades”. This offer of 100 free trades is applied to accounts that sign up others to the e-trade site. In other words, you have to work to get your free trades. E-trade is a better choice for those who are well experienced in the ways of Wall Street.

These are just two of the online investment sites, however these stock tips should give you a good idea of the variety on the web. As a general rule, investors should use websites that are well known, such as the two mentioned above. Searching for the best possible trading price may lead you to scam sites, and this should be avoided at all costs.

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What exactly is a cheap stock? Cheap doesn’t just mean that the trading price of the stock is cheap. That is criteria we will look at, but not the only one. Stocks valued at $100 or $200 can be called cheap if they meet certain conditions. You could even call Berkshire Hathaway cheap last year when it fell from a high of $140,000 a share down to about $75,000 a share in 2009. It has since rallied to over $120,000 a share since. Why would have been deemed cheap? The underlying businesses that make up Berkshire Hathaway were still fundamentally sound and throwing off cash. The stock tanked due to investors being afraid of the economic situation last year.

So that is one thing we are looking for. Stocks that are in good shape whose share prices are taken down, but the business is still good and profitable. It’s tough to invest in a scenario like that, buying when everything looks bleak, but if you are able to, you can make a lot of money. Warren Buffett has said he likes to be greedy when others are fearful and fearful when others are greedy.

Let’s use Warren Buffett for another example. Early in his investment career, he found a stock trading for about $45 a share. This was back in the early 1960”s and $45 a share was a lot of money then. Just based on the trading price of the stock, you might have concluded it wasn’t cheap. What Buffett would do is to closely exam the assets of companies. He discovered this $45 stock had over $65 a share in cash and liquid investments! Imagine buying something worth $65 for $45. That would be a classic example of finding a cheap stock.

These are just 2 examples of looking for the best cheap stocks. They are out there, its up to you to research and uncover them.

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Fundamental analysis looks at the fortunes of a company that issues common stock that individuals and financial institutions may purchase. Fundamental analysis concerns itself with a company’s balance sheet, competition from other companies in the same business, product launches, costs of inputs to production such as raw materials and labor, the effect of macroeconomic trends on the company in question, and really anything that concerns the current and future health of a given company.

Notice that I did not mention the price of a company’s stock, whether it is high or low, trending up or trending down, etc.

Technical analysis looks at nothing except the price of a company’s stock and hundreds of different indicators that have to do with people buying and selling shares of the stock. It is concerned with quantifying all aspects of market activity surrounding the stock, as opposed to the fortunes of the company that issues the stock. Technical analysis in its most basic form has to do with charts of price movements of individual stocks as well as groups of stocks and stock indexes. In addition to raw movements, ‘technical indicators’, often obscure and arcane, have been invented. Technicians use them to attempt to further analyse aspects of market moves, all in the hope of forecasting future price movements with some amount of consistency, through a combination of these indicators.

So if you want to make money in the market, whether through buying stock, buying stock options, ETFs or mutual funds, is technical or fundamental analysis more reliable? Many experts think that one should be aware of both the fundamentals and the technical side of a company and its stock chart.

At the same time, it is true that many experts in fundamental analysis concern themselves only with how well a company is doing when determining whether or not to buy stock or a stock option contract in it, and think that charts are useless tools for the task. Also, many pure technicians have no interest at all in the business of the company whose chart they are analyzing; they think that signals from the charts are sufficient to determine whether the stock should be bought or not.

The argument as to the relative merits of technical analysis versus fundamental analysis will probably never be conclusively resolved. But at least now you’ll hopefully have a handle on the difference between the two.

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When seeking investment advice one will also have to be as cautious and weary about the individual or institution that he is doing business with. It is important that the person or the company is duly authorized and license, has considerable experience in the field and most especially working free from personal motives and interests. Some advisers just can’t help taking his own personal motives before that of the clients and that is someone we don’t ever want to have professional relationships with.

One of the common mistakes of an investment adviser that should give you a cue is him being involved in over aggressive marketing. This is characterized by his being restless while talking to you and doing everything he could to sign you in even if you already out rightly refused. Often in these cases, the adviser is guarding the profits that will go straight to his profit and not yours. There are also some investors who utilize and put up soaring leverage just to make up a certain deal, something really unlikely in a rightful investment transaction.

The worst case however is when you see that the adviser does not know half of what he is saying and he is just as clueless as you about the investment you are consulting to him about. You will have to turn your back against him the soonest time possible or you’ll regret for the rest of your life. Learning the stock market investing basics first will help you get on the right track.

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One website I’ve found to be very efficient and dependable is Zacks.com and I’ve been using since 2006. When the opportunity came along to have them as an affiliate, I welcomed them aboard. Zachs is the one site that has become more helpful now than ever especially with the uncertainty of this so-called bubble within the stock market at this time. Their research is outstanding, as well as diverse. Zachs has been around since 1988 and has performed well over that time. According to the site, they’re up an average of 28% each year since their start.

As a premium member you have all that Zachs has to offer including up to date e-mails of stocks that you list in your portfolio. Find out about the latest rating of stocks, up to date information about what’s going on Wall Street, Mutual Funds, options, and ETF’s along with their Research Wizard program that will help you screen and back-test stocks that you’re interested in.

If you’re already a member, that’s great, but if you haven’t been a member before, here’s you opportunity to take advantage of a 30 day FREE trial of Zachs Investment Research premium membership. If after the 30 day FREE trial, you’re not satisfied with what Zachs has to offer, then just cancel it. I’m pretty certain that most of you will continue the great membership from Zachs.com

Click below to get your 30 day FREE trial of Zach’s Premium Membership. See you there!

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This first post will explain the 401k rules that you need to be aware of before borrowing from your account. There’s lots of good points to consider in this article and it’s one that everyone should read before taking such a drastic move.

Ty Coon talks about stock market investing system over at Stock Market Investing Today. In his post, he talks about determining overall market direction and how to start setting up screens to identify stocks for further review.

We all have to start somewhere and Stock Market for Beginners provides insight into the world of the stock market with easy language that a beginner can understand. This site has covered other investing topics like gold investing and forex so as to give a complete investing perspective to a beginner.

If you ever wanted to know more about investing, Saving Cash Tips has a post about how you can learn to invest, and why it’s important. Many folks who lost money in the market over the past couple of years really didn’t know how to invest, and just put money into an account where they expected it to go up forever until retirement. Learning more about investing is a smart idea to protect your financial future.”

If you have, or will soon be leaving your current employer and have invested in the companies 401k plan, you will certainly need to understand the 401k rollover process.

We all dream of early retirement but only some truely make it their reality. At Retire Early Guide you can find posts to help you pay off your mortgage faster, effectively save for retirement, put money away for your children’s eduction and more!

That concludes this edition of The Investing Carnival. We would love to host again in the future. Don’t forget to leave a comment when you visit the sites. Tell them we sent you!

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Why Mutual Funds?
The stock market is generally considered the best investment over the long haul, but one of the riskiest, especially if you’re a beginner investing for the first time. No one is guaranteeing your money and the factors that control the price of a stock can be complicated. The pool of billions of dollars from many people’s accounts can support a top notch investing team to make decisions without the hefty price bill of paying for them yourself. Also, a mutual fund is significantly less work than managing your own stock portfolio. Choosing stocks, watching their prices to buy in, watching their prices to know when to get out, and making sure what was a good investment 5 years ago still is can be a full time job in itself. Many people just don’t have the time or inclination to do this properly. If this is you a mutual fund can be an excellent choice.

What to Look For When Buying Your First Mutual Funds?
The first things you want to do when buying a mutual fund, especially your first ones, is make sure they have a long healthy track record. Look for mutual funds that have been around for 20 years or longer. If they haven’t been able to stand the test of time you don’t need them right now. The stock market has averaged around 8-10% per year annual returns. The mutual fund you are looking at should at least have maintained this return over the last 20 years to be in your consideration. Also, look at the worse years the mutual fund has had and see if you can stomach that kind of loss without bailing out.

The second thing you want to look at is the performance of the current portfolio manager; he will be driving the decisions. You mutual fund broker should be able to fish up where this person has worked prior.

The last note of caution is you want to make sure you are well diversified. At least split your investment money into four fund pools. I like small cap, international, blue chip, and commodity.

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Bonds and bond funds are among the safest and most reliable investments you can make to ensure an ample and dependable retirement income — if you do it right! Bond Investing For Dummies helps you do just that, with clear explanations of everything you need to know to build a diversified bond portfolio that will be there when you need it no matter what happens in the stock market.

This plain-English guide explains the pros and cons of investing in bonds, how they differ from stocks, and the best (and worst) ways to select and purchase bonds for your needs. You’ll get up to speed on all the different types of bonds and discover how to know when it’s time to sell and how to get the best prices when you do. Find out what you need to know about:

* Buying and selling bonds and bond funds
* Measuring bond risks and returns
* Taxes on bond interest and tax-free bonds
* Customizing and optimizing your bond portfolio
* Common bond-investing mistakes and how to avoid them
* “Risk-free” U.S. Treasury bonds
* Tax-free municipal bonds
* High yield corporate bonds
* The pros and cons agency bonds
* Convertible bonds, derivatives, and other exotic offerings

Packed with sound advice and dependable formulas for ensuring that your bond investments fulfill your retirement goals, Bond Investing For Dummies is the resource you need to put the gold in your golden years.

Click to purchase

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