Investing in penny stocks is a great way to build a portfolio and gain money over a period of time, but there are numerous stocks, bonds and mutual funds available, which one do you select and how do you decide? The best way to begin investing in stocks is to do the research. Start with companies you have faith in and get all of the info on those companies.
Guide to Beginner Investing
The first place to start is with company research, extract the 10K or the 10Q reports, these are the annual filings that companies do for the Security Exchange Committee. Then locate and read the proxy financial statement which tells you about the board of directors, management pay and shareholder proposals. Next the annual report should be read and info on the company going back five to ten years. Another thing to check is the income statements, balance sheet and the cash flow statement of the companies you are interested in; this will give you an idea of how the companies stocks have been doing and the well being of the company.
Once the research is done and the investor has contracted down the companies to invest in, its time to get a broker by going online or in person to start your investments. Stocks can be bought up-to-the-minute and most brokerage firms have virtual swopping for novices where you can go online and exercise trading and buying stocks with virtual dollars. This is a crucial way to make mistakes and learn about the process without using real cash. Finding a prestigious brokerage firm is done the same way by doing the research and making sure they have your best interest in mine and that there are no covered fees for servicing.
May novices can start with penny stocks if they don’t want to spend a bunch of money, many of the penny stocks are under five dollars. This can be a little less profitable but it can be a fun way to kickoff. Once a beginner exercises the virtual trading, he or she can begin small and invest in stocks that have been doing well and start to build their portfolio of investments. The best thing for novices to remember is that you don’t have to start big, practice, go online and buy one or two stocks and watch those. There is a lot of helpful data online for beginners so start small and research everything and swapping stocks can be profitable and fun.