penny stock investing doesn’t have to be scary

Post on 13-Apr-2017

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Want to make sure you’re not making the common mistakes, so you know how to invest in penny stocks the smart way?

Here are 4 easy mistakes to make. Avoid these, and immediately, you’ve got a

huge advantage.

Buying stock in a company that can’t figure out its customers.

When a company doesn’t know what its customers want, the company is on a

one-way trip to Chapter 11.

As simple as it seems, and as fundamental a business function as this

is, companies often don’t know what their customers really want.

They come up with new products that never capture the public’s imagination.

Buying stock in a company that is fixated on a business formula. What worked a

few years ago doesn’t necessarily work today. Distribution models change.

What consumers want changes. Technology changes.

In fact, it’s tough to think about something that impacts the ability of a business to make money that HASN’T

changed. Make sure the business formula is rooted in common sense and

is flexible.

Buying stock in a company that can’t learn from its mistakes.Some penny

stock companies just keep hitting the rewind button and repeating their

blunders.Want an example? Take a look at Frontier Communications $FTR.

You know what Frontier did last month? It actually went out and bought so called “wireline” phone assets. People left and

right are dumping their landlines because they have cellphones.

So what happens? Frontier actually spends more than $10 billion buying

landline networks assets in California, Florida and Texas from Verizon. Why is

Frontier stubbornly clinging to the landline business?

Every now and then a mania come along. It sweeps investors up into the belief

that things are different this time. When we look back on the boom and bust, it

makes perfect sense.

Being aware of a mania when it’s actually happening isn’t so easy. Develop your

own built in mania detector. Be skeptical. When somebody tells you,

“It’s different this time,” hang onto your wallet.

There you go. You’ve got the four big mistakes traders make when it comes to buying penny stocks. Some companies

can’t figure out what their customers want, and some can’t help repeating their

mistakes

. Some penny stock investors get caught up in hype and some patiently sit back. I

hope these penny stock tips will help you, and you’ll have an easier time sizing

up a company before you invest.Got a question?

Have an investment idea? Shoot us an email or leave us a comment on the

website. Better yet, if you own any of these stocks… or are planning to buy a stock like Frontier… shoot me an email

and let me know why!

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