Looking For Winning Penny Stocks

The most crucial aspect of penny stock investing is doing your homework right. You do that, and you win; you neglect to do your research thoroughly, you lose money. As more investors get into penny stocks, it has become important to learn how to do proper research. Things are not helped by the fact that unlike large-cap and mid-cap companies that dominate the financial media, there is very little coverage on companies in this universe. However, if you look at certain sectors minutely, finding winners will become relatively easier.

Although you can find penny stocks in almost every sector, there are some industry groups where there is more likelihood of finding winners. Some of these include;

Biotechnology Penny Stocks- Biotechnology has gone on to become one of the hottest sectors and there are some sure winners that you can find there. Most biotechnology companies are small and in the development stage. Many are in the process of creating potential blockbuster drugs. The best part is that most of these companies’ stocks trade for pennies.

Renewable Energy Penny Stocks- The past few years have seen the price of crude oil appreciate considerably. At one stage, crude oil prices touched $140 a barrel mark. The volatile crude oil prices have led to calls for finding alternative sources of energy that are not only renewable but also environmental friendly.

This has led to the Renewable Energy becoming a very widely followed sector, with companies that have the potential to become huge in the future. Investors can find some real gems in the Renewable Energy sector that trade in the penny region. While it’s not suggested to focus on these two specific sectors exclusively, they may represent a starting point, where newer traders can get a better feel for the ebbs and flows of the markets.

When considering where to look for winning penny stocks, we should also address where NOT to look for them. Under no circumstances should you ever follow any picks that come from free websites, newsletters, or e-mails.

Most penny stocks presented by free services are simply paid shills, or pump and dump artists. They aren’t giving you good advice, and generally they simply want to make money off your back, whether that’s by selling shares as you buy, or by misleading you about the company’s outlook as they cash the checks that same company is sending them. It is becoming increasingly important to know where to look for investments, and also what information sources to avoid. Taking into account the discussion above, you will be off to a good start.

Peter Leeds is an expert on penny stocks. Visit his stock market website and benefit from low priced shares.

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Best Stock Investment in 2010 & Beyond

The best stock investment in 2010 and beyond could be a penny stock. But that’s pure speculation. The best stock investment available to any stock investor offers investment opportunities previously not available to every-day people. And its profit potential knows no boundaries.

Millions of American investors own just one form of stock investment: equity mutual funds that are offered by investment companies. There’s only one real shortcoming with these funds. Most mutual fund companies limit your choices to the conventional: a variety of domestic and international equity (stock) funds, and perhaps a few specialty funds. This limits your investment opportunities.

On the other hand, your chance of finding the best stock investment in 2010 by sifting through the thousands of issues listed on the major exchanges is nil. It simply won’t happen even if you’re cheating - not in one lifetime, anyway. The thing that makes investing so interesting to me is that no matter what happens in the economy, somebody gets rich by being in the right place at the right time.

The problem for most people in the past was that even if they had a great incite, they did not have enough money or know how to invest and make money from it. There was no easy economical way to place your bet. Now there is, in the form of a stock investment called an ETF (exchange traded fund). These are simply baskets of securities that trade like any other stock on an exchange. Now the small investor is on a level playing field, because the variety of these funds offered is extensive and still growing.

As they say, there are always investment opportunities somewhere. Now you know how to participate. Let’s look at some examples, starting with the recent past. Gold went to a record high in 2009 and might continue to climb if the dollar falls further. You could have simply made a stock investment before gold prices soared by buying an ETF. When the stock market got crushed in 2008 and early 2009 you could have been one of the few who MADE big money by simply owning an inverse ETF that goes up when stock prices fall.

Now let’s look into the future. If you think that the government’s actions in dealing with the financial crisis will result in higher inflation and interest rates… how can you protect yourself and profit at the same time? There are ETFs out there that amount to a bet on interest rates; and some that go up when the price of basic materials like copper, aluminum and steel go up.

How can you profit when real estate or oil prices surge? A simple stock investment, whether for $500 or $5 million, in the right exchange traded fund and you’re in. The list of investment opportunities goes on and on. Now you can invest in a broad array of alternative investments not readily available to you before. And you can put together a TRULY BALANCED portfolio through your brokerage account over the internet.

Go to your brokerage account, or another investment site, or Google “ETF”. Spend some time getting familiar with the list of exchange traded funds available. If you have an investment idea, you’ll probably find a fund that will accommodate you. Especially if things in the economy get dicey in the not-too-distant future, the best stock investment in 2010 and beyond will likely be on this list. Now even the small investor knows no boundaries.

A retired financial planner, James Leitz has an MBA (finance) and 35 years of investing experience. For 20 years he advised individual investors, working directly with them helping them to reach their financial goals.

Jim is the author of a complete investor guide, Invest Informed, designed for average investors or would-be investors of all levels of financial background and experience. To learn more about investments and investing and his new financial guide go to http://www.investinformed.com.

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