Top Penny Stocks Picking Guide – Part 2

This is part 2 of our top penny stock secrets:

4- Competitive Advantage: After all those numbers its time to look at the business itself. How does the company make money? What makes the product unique and why would the customer buy from them? Do they compete on price/quality/both? What does the company do to stay competitive? These are important questions that you need to answer. The better answers you get in this step, the more informed your stock buying decision will be.

5- Management Team: Nothing works better than a well-oiled we mean cohesive management team which focuses on providing customer service coupled with an eye for the bottom line. Start by looking at the track record here. Most successful companies are started by folks who have succeeded in other industries or companies. Usually companies with founders who are lacking experience seek out senior board members to gain credibility. Make sure that these folks are ethical and take care of their customers.

Before you jump in and start buying penny stocks remember that the time you invest in doing your research will save you thousands or hundreds of thousands in profits.  These penny stocks could be the next Microsoft or Google that can double, triple your initial investment very quickly. But, you should take extra precautions and protect yourself against risks such as fraud. These could be from unethical brokers, pump and dump schemes and unaudited financial reports etc. Don’t devote more than 10% of your portfolio to penny stocks. They are too risky and volatile to have any more money allocated to them. Stick to your investment rules and don’t get greedy. You should do just fine.

There you have it. 5 Steps to finding the top penny stock of tomorrow before it makes the news and some great advice (if we say so ourselves) to keep your profits high. What are you waiting for?