Today we wanted to review how to trade penny stocks for beginners. Once you have selected a few stocks, you should take a closer look at them. Now we will review some details about the penny stocks investing below:
Every company on the stock exchange has a point on the website called “Investor Relations”. Here you will find all the data, facts and events that concern you as an investor.
Read annual report
Read the Annual Report to see how the company is financially sound. But also, what went well and what went bad in the current financial year.
Track news of the listed company. These provide an up-to-date overview and are often supplemented with expert opinions and analyzes.
How to trade penny stocks for beginners?- Set the number of shares
If you have decided to buy a specific stock, set the stock option. However, do not put yourself under pressure to buy a certain number of shares here. On the contrary, start small, so that you get a feel for what it’s like to enter the stock trading. Many investors start with 1-3 shares. That’s not unusual and, depending on the title, can already be a lot of money. Of course, how many shares you buy also depends on your budget and the so-called asset allocation.
How to trade penny stocks for beginners?- What is an asset allocation?
As simply, the asset management term describes what and how many units of your assets you hold in which asset class (e.g., stocks, funds, commodities, …).
For example, suppose you plan to invest $ 5,000. Now, of course, you could buy shares on a stock exchange for that amount. However, to minimize the risk, it would be better to divide this amount among different asset classes. For example, 30% in equities, 20% in gold, 20% in bonds, 20% in commodities and 10% in real estate.
For more information about penny stocks market and how to trade penny stocks for beginners, stay tuned our leader finance themed web site.