Penny Stock Journal

So you want to get rich quick then?  Well Penny stocks can certainly help you get there faster.  I've known some people who have invested a 5 or 10 thousands dollars in penny stocks and have ended up with 20 or 30 times their initial investments.  However, I have also known people who have invested in penny stocks and lost everything after the company went under. 

When finding the right penny stock, you have to first look at the company you are investing in.  The first thing you want to look at is how much of the company that the insiders own.  For example, if a CEO is scooping up lots of his own shares, the stock for that company is likely to move up.  Anytime you hear about insider buying or trading, you can usually guess that the company has some good news yet to be announced.  This is a good thing because stock prices are based off of future earnings.  If the future earnings are expected to go up, then the stock prices will increase. 

Another important aspect before buying into penny stocks is do your research.  If the stock is in a particular industry or field, and you are bullish on the industry as a whole, then you might want to look at particular stocks that you believe would be a good deal.

The common mistake made is people do not perform an industry analysis before investing in a certain penny stock.  If the oil prices are moving up fast, then an investment into a new exploration company may not be a bad idea.  These types of investments are usually based off of speculative earnings rather then current earnings. 

If you do start investing into different penny stocks, make sure you keep a penny stock journal.  Use the penny stock journal to keep track of the different factors that made you invest in the initial penny stock.