Good Stocks to Buy – You Got a Penny?

By William Foxx

In my area of work you get many questions just like this one: “Which is a good stock to buy?” And sometimes, depending on the person, I answer back with another question: “You pot a penny?” People always stare at me with a look on their face that says: “Is this guy a joke?” or “Is this guy for real?” Well no, I’m not a joke, and yes I’m for real.

I gotta tell ya, it’s how I started out; penny stocks. They’re one of the best stocks to buy because of the little cost they represent and the big chances you have to get money out of the deal. With normal stocks you’re going to have to invest more than a thousand times more to begin making some real profit out off them. I’m not saying you shouldn’t invest in them, by all means do so. The thing is that if you’re starting out – even if you’re already experienced – going with penny stocks is a wise decision.

But why?

Well, how many people have lost all their money in the stock market ? Hey, it’s not as unusual as you might think! But those people start off buying stocks from the all popular Apple , IMB, Google, and all the other big boys out there. Do you know how much one stock costs from some of these guys? It goes from $100 – $500, some reaching the +$1,000.

One hundred dollars is ten thousand pennies! Even though a stock penny hardly ever really costs just one penny, I think you can see my point. But coming across a good penny stock to buy isn’t that easy. You have to do your research; you’re homework. Once you do have a penny stock spotted, then all I can say to you is great job, good luck, and keep it up! Because on your path to success you’ll see many riches many could just dream of.

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The Right Time to Buy Stocks

By Mohamed Farouk

When is the right time to buy stocks?

When can a person buy a stock while being sure of making some good profits?

Timing is a very critical factor in the world of investment, buying the share you intended to buy few months later may result in either reducing your profits or maximizing your gains. Some stocks go up more than 10 percent in one day and some others drop with the same amount, buying a stock before or after that day can certainly affect your investment income, and that’s why it’s very important to know the right time to buy your stock.

What to buy, is more important than when to buy

Chartists or people who only depend on technical analysis to make investment decisions may buy a company that is on the edge of bankruptcy just because its chart looks good and they don’t take into consideration the fact that unless you buy a company not a stock you won’t be able to make money and you may face a catastrophic event that erodes all your savings.

Knowing what stock you are going to buy and knowing the exact reason you are buying it is crucial to making money out of your investments. For example, knowing that you are buying the Coca-Cola company because it has dominant market share, a strong competitive advantage and a satisfactory dividend are examples of buying something that you know or that you understand.

Buying a company that you understand everything about is a key factor to making money out of the stock market, after all, industry trends, introduction of new products and competition are among the factors that affects share prices directly. If you did not have an understanding of the industry that your stock belongs to you may lose some of your money.

The right time to buy stocks

Suppose that you decided to buy shares of a mining company that extracts gold, baring in mind that gold prices affect the company’s shares. If for example the price of gold went up, the company will make more profit and its shares will rise and vise versa. In such a case you should watch for declines in gold prices and see their effect on your stock’s price. As soon as you realise that further declines in gold prices are no longer affecting the stocks price then this may be a perfect opportunity to buy it.

It’s not necessary that the stock becomes tied to commodity like gold, after all all stocks are subject to many other factors that can affect their own prices just like gold’s prices affects mining companies. Interest rate changes, tax rates, input prices and inflation are among the factors that affects almost every traded stock.

If your stock use to go down with the increase in interest rates, then you should look for the time when further rate increases doesn’t affect the price any more. At this point the stock has reached a level where investors aren’t willing to dump it at lower prices and that’s why buying it at that state makes the perfect sense. If interest rates went up further the price won’t move that much and if the opposite happened you will start to make money.

Of course stocks will always keep responding to the external variables and that’s why its advised to notice the degree to which they respond to these variables and as soon as the response degree becomes lower, then it may be an indication that stock won’t go down any further.

Want to have a solid and practical knowledge about investments?