This is a tricky one. After all if we all knew which small cap stocks to invest in we'd all be enjoying huge returns on our investments.
But in some cases the lack of success with this type of stock investment is down to a lack of research and knowledge. If you want to focus in on a particular niche sector, you need to figure out which one is going to be right for you. And you cannot do that by closing your eyes and sticking a pin in a bit of paper. So how can you find the all important right sector for you? Firstly you should think about identifying a sector that you have a natural interest in. If you do this you will find it easier to get the information you need - and your own knowledge could also come in handy. You won't often find a huge amount of information about small cap stocks, so the more you know personally the better the odds are of finding something suitable. Google should also be your friend when you are looking for specific stocks to invest in. Simply searching for 'small cap stocks' plus the sector you are interested in will produce some results initially. You will also find websites and experts that focus in on these stocks alone. You may find it helpful to make notes and lists of potential companies to invest in as you go along. You can then go into those in more depth and find out all you can about them. One thing you need to remember is that this kind of stock is highly volatile. Since you are essentially investing in the potential future of a company you need to buy the stock and hang onto it, rather than selling it at the first opportunity. This is how many people play the market with these stocks. Remember too that identifying hot sectors can also be useful. For example green issues and any similar sectors are well worth looking at for obvious reasons. A company which has some good ideas for saving the planet in some way could be one to watch for the future. As you can see, finding the best small cap stocks in a particular sector is partly about making the most of what you know and partly about finding out what you don't. Getting the combination right could pay off for you in the long term. Paradigm Capital Management is a trusted small cap company. With a long history of small-cap investing, the company employs a disciplined, bottom-up approach with an emphasis on fundamental analysis and extensive management contact. We have the experts when it comes to penny stock investment and we can definitely assist you with your financial goal, contact us at (518) 431-3500 Also read: What to Look For in Penny Stocks Picks
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Due to the subjective nature of human beings, it can be said that everyone has a misconception. It is normal for people to have misconceptions about things that they do not fully understand. The best example would be first impressions. A person may have predetermined impressions about somebody whom they don't know that much. Most of the time, once they eventually get to know the person better, their first impressions are proven wrong. This same misconception is usually applied to penny stocks. These stocks are normally receive a negative first impression; because of this, they are quickly disregarded. Here are some common misconceptions: You will lose all your money once you invest in penny stocks. This false impression originating from the belief that penny stock trading is risky. Basically, any form of stock investing will always have risk factors. Yes, it is possible to lose all your money in penny stocks trading, but you can always avoid this by minimizing the risks. A good scenario is when you start a new business. Starting your business involves high risks; however it is proven that most businessmen are not discouraged by this factor. Successful businessmen are known to minimize any possible risk by carefully planning how to effectively start their own business, researching, seeking advice from professionals, and eventually taking action. The same procedure applies to stocks. Researching, consulting and exposure to actual stocks trading will definitely lessen your risks, therefore removing your worries in losing all of your money. Insufficient liquidity in penny stocks Basically, liquidity means having sufficient volume to effortlessly buy and sell your shares. For instance, if a penny stock only has two trades, it can be said that it has low liquidity. This happens because there are not enough traders involved in buying and selling. On the other hand, if a stock experiences huge amounts of trades, which is a clear indication of a generous number of traders, it can be said that it has a high level of liquidity. Buying and selling of shares would be trouble-free. An aftermarket report recap of penny stocks will clearly show that there is ample liquidity in the stocks market. It's very easy to make money in penny stocks. Purchasing shares at a penny and selling them for two cents is a vey attractive strategy for any investor. It may look like an easy game plan, however, it's not that easy to accomplish. It is a fact that stocks investments can be very rewarding. But in order to be rewarded, thorough research and abundant exposure is needed. To make things simple, only hardworking and dedicated traders can achieve profit. This is the main reason why numerous people are pessimistic toward penny stocks. Their attraction to the possibility of gaining profit may be costly. Most of them invest in penny stocks without vital knowledge and actual experience, only to be disappointed financially and emotionally by their hasty decisions. It is a fact that investing in penny stocks involves high risk, but at the same time, it may bestow high rewards. Paradigm Capital Management is a trusted leader in small cap investing. With a long history of small-cap investing, Paradigm Capital Management employs a disciplined, bottom-up approach with an emphasis on fundamental analysis and extensive management contact. We have the experts when it comes to penny stock picking and we can definitely assist you with your financial goal, contact us at (518) 431-3500 |
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September 2018
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