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Saturday, June 4, 2011

How to prevent your losses in the Penny Stock Market

How to prevent your losses in the Penny Stock Market ; There are a huge amount of Penny Stocks, Hot stocks & Microcap newsletters out there on the internet. This is both good & bad.

There is lots of free advice to shift through however what can make the difference between a profit or a loss is your stock market education! Yes you did hear right it. Is time to not just follow the advice of others but evaluate their advice against some basic market principles. So time to roll up your sleeves do some of your own background research and get educated.

As we see the market start to recover more people will be looking to invest their cash in the markets and many start out with penny stocks as a way of reducing their exposure to risk. What they might not realize is this area of the market is often more volatile and therefore more risky for the start up wanabe penny stock investor. So the right advice is even more important and this needs to be checked against those basic market principles.

The big problem that exists is that although many of the penny stock advice is free its because it is sometimes linked to profits from those companies selling those particular penny stocks. It’s even possible that those sending the “free advice” actually own stocks themselves in said companies! This is what is known as a conflict of interest.

What results is known as a “pump & dump scheme” – the price gets inflated and then the stock is sold off. read .. How To Buy Penny Stocks On Etrade

How to you avoid this pitfall? Do your research and get educated. For the latest updates PRESS CTR + D or visit Stock Market news Today

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