Would A List Of Penny Stocks Be Enough To Make Money With Penny Stocks?

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25Feb/100

Would A List Of Penny Stocks Be Enough To Make Money With Penny Stocks?

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This is a question that many people seem to ask and yet no one has really given a definite answer to. Well, let me answer this for you.

No. A list of penny stocks is not enough to make much money with penny stocks. Why? Because these lists are usually public which means that there are thousands of other investors looking at the same penny stock ready to pounce. This is not good for you because it means that what may have seemed like a good pick last week will turn sour the day you decided to buy the stock. I have seen this happen many times to many people and it can be really disappointing.

Thousands, probably millions, of dollars are lost every day on the stock market, and a good chunk of that comes from bad penny stock trading. Penny stocks can be extremely profitable if they are chosen correctly. But if not, investing in the wrong stocks can lose you a good deal of money. A list of penny stocks is just that, a list. It might not necessarily be a good list. For all you know, they could be the worst possible picks. This is why you must only trust your money to a system that has been proven to make money.

Do not waste your time investing in stocks that some list told you to do. This is not investing. This is mostly speculation. Wealth is not made off of speculations. If you can use the correct system for proper penny stock investing, then you won't have to worry so much about the risk because you will have a reliable source for stock picks and not just some list of penny stocks.

If you've been keeping up with my blog posts lately you'll know I've come to adding a few news posts from around the web on this subject. I've got a couple more today that are new and updated, so let me know what you think of em...

Best Penny Stock Advice: Stocks to watch for 09/21

As promised after doing extensive research and rechecking all my picks i have come up with list of hidden gems/hidden jewel penny stocks that would be give excellent returns for the months to come and in 2010. Please visit ...

Start Right With Your Penny Stock List

The downside of it is that there are relatively few shareholders who frequent this slot. This concern is mostly attributed to the higher risk it bears because of its lack of relevant and useful information. The penny stock list is like ...

Do It Right With Your Penny Stock List

Always check with your penny stock list if the small cap company is stable. That means you have to conduct your own research on its operations, fundamentals, and business history. Some of these companies are young and just starting up. ...

Hope you enjoy the read as much as I did and please if you have something to say, use the comments form below to let everyone know your thoughts.

Have a great day!

What Do Mutual Fund Ratings Involve?

Investors who want to restrict or reduce their risk often pick mutual funds. Mutual funds are a diversified group of bonds, money market securities or stocks that generate returns from more than one source. However, thanks to their diversification, the risk involved is reduced or limited. Mutual fund ratings are used to assist smart investors derive which funds are best for them, based on the extent of risk that is involved. Different companies determine the fund rating based on their own criteria.

Morningstar
Morningstar has been rating funds since 1985. They allocate 1 to 5 stars to various funds and use it as a guidance method for their investors who are looking to enhance their portfolio. The rating system is based on the company's initial risk score of the fund. They then subtract that score from the five year return of the fund and arrive at a rating that is risk adjusted. The problem here is that the rating system is based on past performance and has little value in determining the actual risk factor of the fund. This is probably not the most reliable source of determining future risk of your funds.

Lipper, Inc.
This company has been analyzing funds and helping investors select the best mutual funds for them since 1971. Lipper ranks funds based on performance risk, but is based on poor or risky performance meaning that the higher the risk, the higher the rating. The lower the risk, the less chance the investor has of losing money. Lipper has a five point rating system that includes five different criteria (total return, consistent return, preservation, tax efficiency and expense) to help determine the actual risk of a fund.

Business Week
Subscribers of the Business Week magazine are treated annually to the Mutual Fund Scoreboard, which rates funds on several criteria. Looking for something more current? Check out their website where you can find the results updated monthly. The funds earn their rating by their scoring in different areas, but get their overall rating by how well they have performed over a 5 year period, based on a risk adjusted return. Each fund is then assigned a grade score from A to F. Its the A rated funds that you should consider for your portfolio.

Schwab Mutual Fund OneSource Select List
Schwab's experts have created a list of pre-screened, no load, no trans
1000
action fee funds. This list is updated quarterly and utilizes a list of strict criteria to arrive at the ratings. These criteria include a minimum three year performance track record and have a minimum of $40 million in assets (in most cases). The funds that make the list are rated on risk, performance, diversification and other factors.

The wise investor will not rely on only one rating system, but, in fact, several in order to obtain a clear picture of a mutual fund's risk factor. While past performance of a fund may shed a little light on the fund's risk factor and viability, future performance can not be predicted based solely on this criteria. A complete picture of the company and the fund must be obtained in order to fully assess the potential risks and strength of the fund. Even then it is not an exact science and there are no guarantees.