Wednesday, January 8, 2014

Why Its So Important To Not Buy All The Shares In A Penny Stock Or Low Single Digit Stock all At Once'

Now here is another no brainer. If you decide to purchase shares in a penny stock or low single digit stock never buy all the shares all at once. Its impossible to know the exact bottom for a stock. Penny stocks and low single digit stocks are a lot more  more volatile then the typical higher price stocks. Use this volatility to your advanatage. The price that you are paying for a penny stock or low single digit stock will most likely not be the bottom for the stock. The shares will most likely go lower before they go higher. Most penny stocks and low single digit stocks that are trading close to their fiftytwo week lows will almost certainly go lower before they go higher. I would recommend investors purchase penny stocks or low single digit stocks in positions of three or four increments that way everytime the stock declines a little further you can add to your position in the stock at a lower price. You will be averaging out the price you pay for the shares. Instead of trying to guess when to buy all your shares at the right price. In other words if the share are a good value at 2 dollars they are an even better value at just 1 dollar thats assuming the companies performance is no different than it was when the stock traded at 2 dollars

The only time that I would avoid adding to your position in a penny stocks or low single digit stock at a lower price would be if theirs a real deterioration  in the companies fundamentals. If theirs a very large drop in the price of the shares thats accompanied by a serious deterioration  in the companies financials maybe a large loss or some other very serious issue. Than I would most likely take a pass on buying more shares of the stock. As far as the shares that you already own you can just retain those shares.

Some Excellent Penny Stock Investing Resources

Penny Stock Investing Newsletter

Manhattan Calumet Value Stock Hotline

Red Chip Companies

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