Best Penny Stock to Buy – Turn $1,000 to $1,000,000 Through 3 Easy Steps Strategy!
One of the key advantage of penny stocks are that they require minimum capital to invest with. As most of us have limited funds for investment, it is critical that we are able to find a good stock that is low in price to start our initial investment.
Step 1: Look for Good performing Company
It’s vital that for every investment, we need to do our due diligence in understanding the business and performance of the company stock that we’re going to invest in. This is in line with Warren Buffet, the most successful stock investment guru, strategy in investment. The three key areas of study are:
a. Business model – Does the product or service has durability? Does it have competitive advantage?
b. Top management – Do they focus on integrity? Do they believe in the business or only for their own pocket?
c. Company financial performance – what’s the return on shareholder’s equity? Is it consistent? What is their long term debt against earnings?
Step 2: Time Your Investment
As the saying goes, ‘buy when the stock is low and sell when it is high’. You’ll need to keep track of the history of the stock price. With the correct technical analysis, you’ll realize when the stock is at its lowest. This could be due to a one-off negative market sentiment which is temporary or a structural change due to industry recession. These are the best time to enter the market as there will be a turnaround when these temporary negative sentiments are over.
Step 3: Time Your Exit
When the market is over-hyped, it’s a good chance that the next doom will be coming soon. Smart investors like yourself will need to exit the market and consolidate your funds so that when the next down time come, you’re all ready to repeat your money making stock investment again. A simple rule of thumb is to compare the company price to earnings ratio over the past years and if it hits a record high (way over the norm), it’s a signal that the market has overpriced the stock value of the company and its time to exit!
Thank you for reading this article. I hope that it has helped you in finding the best penny stock to invest and see exponential grow in your funds!