The meaning of cheap stock, that is, stocks that they are trading under 60 cents or below, are always enticing - because you put down a small amount of money for a potentially lucrative return. It also looks good because with your investment you are getting a lot more shares, or contracts for you amount invested.
However, for many investors, this scenario is just a pipe dream to buy that stock at 10 cents and see it go to $10. Does happen but not very often and it can be very costly. Sometimes they are cheap for a great reason, they are NO GOOD
So what are the downfalls to cheap stocks?
How can you identify if they are cheap These cheaper stocks can also be categorized by their market capitalisation (that is, the total number of shares multiplied by the price per share). Which is the total value of the company If a company's market cap is less than $100 million, the company is considered a fairly small stock, or a "small cap stock".
So is bigger better, or are small Fish sweeter, Will they grow? Historically, small cap stocks have outperformed large cap stocks in terms of returns. However this is not always the case and you have to remember the saying risk versus return. This isn't because a lot of cheap, small companies are better investments than large companies, but because almost all big companies were small when they first sold stock. Everything normally starts out small. Microsoft started in a garage, and now they are one of the biggest company in the world. Most large companies are through growing or are just fighting for market share.
Money-hungry investors turn to small stocks to buy, because these stocks are cheap and it looks like the bigger companies have not much room to grow. Right? We all want to get rich from the stock market, otherwise we would not trade? True? Read the Fine Print- Be careful of 'the cheap stock'
Traders and investors will often flock to internet chat rooms and talk up a cheap stock, saying they are going to find large amount resource, or they are doing a big deal with a big company. Why does this happen because people buy it and then want someone else to continue to buy it.
This is called "pumping and dumping" and it happens all the time. So make sure you are careful. As if this was true what is being said in the chat rooms, it would be inside trading. Illegal so make sure you do you own homework.
A stock that maybe trades only 5,000 shares a day is a good example of this type of scam and highly illegal. So do not fall into the trap. Otherwise you will lose your money. By pumping up the stock it creates the price to move higher for no good reason. This stock will soon be a DUD Trade. This Stock used to trade at $5 now its 50 cents. So that's cheap? Wrong
Another thing to avoid is a stock that has dropped significantly in price. Just because a stock looks cheap doesn't meant it's going to return to glory and you'll make yourself a big profit. The reason they fall is because something fundamental may have changed, they could have lost most of their revenue by losing a contract, or could be sued there are a host of reasons for this stock to fall.
You have to ask yourself why the stock fell in the first place? Those odds aren't good that these stocks will rebound. The odds aren't in your favour. Following the trend, remember trend is your friend.
BUT REMEMBER THEY CAN REBOUND..
Remember, however, that stocks that have crashed significantly usually continue in one direction: down. Look at the rest of the sector, see how they are performing. Something also to consider is make sure you do your research on finding a great broker, otherwise bad brokers can make you broker. They can be selling and promoting these stocks from time to time, why as they have clients that are losing money, which they want to help them make money. This can be the case when they have really big clients. We have researched these broker to find out who we believe is the best. To find out more find out from www.cfdfxreport.com or email support@cfdfxreport.com
However, for many investors, this scenario is just a pipe dream to buy that stock at 10 cents and see it go to $10. Does happen but not very often and it can be very costly. Sometimes they are cheap for a great reason, they are NO GOOD
So what are the downfalls to cheap stocks?
How can you identify if they are cheap These cheaper stocks can also be categorized by their market capitalisation (that is, the total number of shares multiplied by the price per share). Which is the total value of the company If a company's market cap is less than $100 million, the company is considered a fairly small stock, or a "small cap stock".
So is bigger better, or are small Fish sweeter, Will they grow? Historically, small cap stocks have outperformed large cap stocks in terms of returns. However this is not always the case and you have to remember the saying risk versus return. This isn't because a lot of cheap, small companies are better investments than large companies, but because almost all big companies were small when they first sold stock. Everything normally starts out small. Microsoft started in a garage, and now they are one of the biggest company in the world. Most large companies are through growing or are just fighting for market share.
Money-hungry investors turn to small stocks to buy, because these stocks are cheap and it looks like the bigger companies have not much room to grow. Right? We all want to get rich from the stock market, otherwise we would not trade? True? Read the Fine Print- Be careful of 'the cheap stock'
Traders and investors will often flock to internet chat rooms and talk up a cheap stock, saying they are going to find large amount resource, or they are doing a big deal with a big company. Why does this happen because people buy it and then want someone else to continue to buy it.
This is called "pumping and dumping" and it happens all the time. So make sure you are careful. As if this was true what is being said in the chat rooms, it would be inside trading. Illegal so make sure you do you own homework.
A stock that maybe trades only 5,000 shares a day is a good example of this type of scam and highly illegal. So do not fall into the trap. Otherwise you will lose your money. By pumping up the stock it creates the price to move higher for no good reason. This stock will soon be a DUD Trade. This Stock used to trade at $5 now its 50 cents. So that's cheap? Wrong
Another thing to avoid is a stock that has dropped significantly in price. Just because a stock looks cheap doesn't meant it's going to return to glory and you'll make yourself a big profit. The reason they fall is because something fundamental may have changed, they could have lost most of their revenue by losing a contract, or could be sued there are a host of reasons for this stock to fall.
You have to ask yourself why the stock fell in the first place? Those odds aren't good that these stocks will rebound. The odds aren't in your favour. Following the trend, remember trend is your friend.
BUT REMEMBER THEY CAN REBOUND..
Remember, however, that stocks that have crashed significantly usually continue in one direction: down. Look at the rest of the sector, see how they are performing. Something also to consider is make sure you do your research on finding a great broker, otherwise bad brokers can make you broker. They can be selling and promoting these stocks from time to time, why as they have clients that are losing money, which they want to help them make money. This can be the case when they have really big clients. We have researched these broker to find out who we believe is the best. To find out more find out from www.cfdfxreport.com or email support@cfdfxreport.com
About the Author:
When you talk to someone who is highly intuitive they tend to do more listening than talking. They observe everything you say and how you say it and more importantly what you did not say. By doing this and observing the environment in which the communication took place, they are able to read between the lines and sense more about you than you ever thought possible.
Intuition can also be applied to all aspects of life beyond communicating with others. Have you ever noticed that when you have a pressing challenge that occupies your mind for some time that somehow almost through thin air the right answer comes to you? Often we call this a hunch or inspiration. What do you do when you experience a hunch or inspiration? Do you follow through and investigate it or do you let it fall through your fingers like it never existed? Have you ever experienced getting the same hunch over and over again separated by long periods of time? When inspiration or a hunch comes to us, particularly repeatedly, this is a signal that we need to pay attention to.
Where do these hunches come from? To answer this question I'll need to involve a little bit of quantum physics. Don't worry we will not go into too many esoteric details here.
Do you realize that you and everything around us is made up of energy, space and matter? If you look at inanimate objects under a microscope you will see that they are made up of molecules, and every molecule is made up of atoms, and every atom is made up of electrons, neutrons, and protons. Each has a positive or negative electrical charge and a whole lot of space. If you continue looking under the microscope you will see that these atoms are vibrating at a high speed of vibration.
If you do not believe me let us consider an ice cube. If we add energy in the form of heat to an ice cube we'll get water. If we continue to add more heat energy to the water we will get steam. What has really changed here? At a molecular level nothing has changed, however, the ice has disappeared and has become steam in our atmosphere. What changed was the rate of vibration of the water atoms contained in the ice. Now that we understand this critical principle, I think you will agree with me that everything around us represents energy. If not, well, youll need to review your science textbooks.
If everything around us represents energy then the thoughts we have also represent energy. Correspondingly, since energy cannot be created or destroyed and it can only change its form based on the laws of thermodynamics then it is quite possible that we can pick up the energy of others and we can transmit energy to others. This has often been called telepathy. A short example is to think about people you know and have met that you got a bad vibe from. Nothing may have been said but you just knew that, that person was trouble.
If we acknowledge that it is possible to receive energy from others we must also entertain the idea that it is possible to receive energy from a source outside of human thought. Energy flows to and through us. In very much the same way that an acorn can grow into a large oak tree, you and I can take the energy that flows to and through us to take ideas in our conscious and subconscious minds and convert thought energy into its physical equivalent. The process of recognizing the energy that flows to and through us is what our intuition is all about.
If you want to become more intuitive you have to become hyperaware of who you interact with and your surroundings. You have to get in tune with reading vibrations so that you can act on your gut feelings and hunches. Your success depends on grabbing those ideas and little flashes of intuition and putting them into action in your life.
About the Author:
When you change your habits, actions and thoughts, your whole life will change. Click on www.GlobalSuccessILG.com to learn about how to increase your income and create wealth in your life. This site covers topics from leadership, to tax strategies, to growing your business and many more. Ray Stendall is President of Wealth Expressions, Inc. and coaches individuals on how to achieve their goals.
