How to Protect Yourself Against Penny Stock Scams

Many people have been subject to penny stocks scams. They hear about the next big hot penny stock in message boards, e-mails, faxes, and other people who claim that such and such penny stock will go through the roof. So they listen and put some money in the penny stock. Then, lo and behold, they see their investment crash and they wonder what went wrong. Then they go to other people's fault, when in fact, they have no one to blame but themselves. Here are three ways to protect against penny stock scams yourself.

1. Take information that you see on message boards with a grain of salt.
Message boards are a double-edged sword. On the one hand, they can be. Be a great source of information On the other hand, message boards to gnaw the beginners. Been fertile ground for the wolves These wolves are known as "pumpers". They will throw important sounding terminology at you and come across as to make sure that this is the next penny stock to invest in. Sometimes these "pumpers" are none other than those paid by the hyped penny stock company to artificially inflate the price Available through word of mouth. To use when making your final decision. Use extreme discretion when deciding what information
2. Ignore all mail, email, or fax a penny stock hypes.
A penny stock promoted through unsolicited e-mail, email, fax would label themselves as large red letters spelling SCAM. Do you know people who are all talk and no action? Penny stocks that promote themselves via spam are all talk and no action. The sole purpose of spending is to create the price of the penny stock blow. Artificial height Then the people who promote the stock will sell their shares at a profit thus driving the share price down so those who have recently invested in a negative loss. What makes the situation worse is that the same people who recently bought will hold in the hope of having the stock price to rise again, but 9.9 times out of 10, the stock price will continue to fall and they will suffer a greater loss.

3. Do your own research and personal responsibility.
If you happen to stumble on a penny stock that shows promise, do not take it at face value. Do your own research on this penny stock. What kind of services or products to the offer? How is their cash flow already in recent years? Do they have the bankruptcy recently? Take a look at their quarterly statements. In other words, you and you alone must take full responsibility for any action you take when it comes to money in penny stabbing to take supplies.
Follow these three guidelines and you will do well in protecting yourself against penny stock scams.

Investing in Stocks: To Hold or Sell Yesterday's Winner?

Here's the problem. You bought a stock many years ago that is now worth 10 times what you paid for, but in the last 5 years rate seems to be super glued to the wall. You've always been a proponent of "buy and hold" and this file seems to bear out the wisdom of that strategy. But now you're not sure - maybe it's time to move on to something else.
The question you keep asking yourself the same question thousands have asked before - when I know that this powerhouse has run out of gas and it's time to sell?
Here's needed some help with both sides of the coin:
1. "Buy and Hold" does not mean "till death do us. "Every investment strategy consists of three basic components:.. Buying, spacious, and selling Obviously, you buy and hold parts worked well, the stock was a good choice and has significantly increased in value, despite what probably some volatility along the way. It seems like you've gotten out of the "growth" phase of the Security With the lackluster performance of recent years, the stock may have matured and simply will not repeat its past performance as Paul Simon would say.. "Time to to sell, Nell. "
2. Is there a dividend yield is high enough to preserve the security? Figure out your dividend yield based on your original purchase price. If the 5% or more, which is not a bad annual return for a high security with a future appreciation potential. A company that has a record of dividend increases is more reason not to sell.
3. You know if the price decreases not above move, bragging of your average annual return. If you are up 200% on a stock of more than 5 years, boast an average 40% average annual return makes for a good story. If you're still an increase of 200% in 10 years, in all likelihood someone a better story.
4. Something overheated has a cooling off period. After a long run, the weekly closing price of a share sometimes within a few percentage points below the average volume. According to technical analysis, as this takes time, the stock can easily form a new base price. With an increase in the volume, the stock may "break out" and continue to rise. In the event that the share price falls (especially in the latter stage bases), since this is a danger sign could mean institutional money is moved away from the stock.
5. No matter how much you want, you can not change society change. Change in business fundamentals, management and business strategy can all affect the price of a stock. Sometimes it's a change for the better, sometimes not. You have to realize that nothing you can do will change this change. Sentimentality does not have much space in the stock market. If the foundations are not what they used to be, then that's the way it is. Look at yourself in the mirror.
6. Tell the truth - this is really all about the capital gains tax? We all like to play with ourselves, psychological games so do not be ashamed to admit it. If you add your net worth on paper, it looks higher than before tax after tax, right? Unless you plan to die with all your paper profit on the "step up" in basis to receive, recognize the difference between a game and reality.
If you're on the fence about whether to hold or sell, take the time to explore your options and decide your best course. Indecision will get you nowhere.
Glenn ("Chip") Dahlke, a senior contributor to the Living Trust Network, has 28 years in the investment business.
He is a Registered Representative of Linsco / Private Ledger and a principal with Dahlke Financial Group. He is licensed to securities transactions with persons who are residents of the following states: CA. CT, FL, GA, IL. MA, MD. ME, MI. NC, NH, NJ, NY.OR, PA, RI, VA, VT, WY.