Residual Income

How Do I Invest In Penny Stocks and Earn Residual Income

 

One way to make sure you have enough money to safely retire and live comfortably is to invest your money, and not only invest it, do it wisely. There are a million things to invest in, but today we will talk about penny stocks.

There has been lots of talk recently about penny stocks and how some people have managed to get huge returns trading these. However, these are stocks like any other and there are still plenty of risks involved. In order to see any real profits you need to invest wisely.

Starting out is quite easy (and cheap) as you can open an account with just $100. In fact, it’s advisable to start with a small amount if you have never invested before and don’t know much about trading stocks. By the time your retirement is around the corner, you will have mastered the art of investing or given up.

Like the name suggests, penny stocks are very cheap, sometimes even a penny per stock. But depending on the exact stocks you invest in, returns can be huge. Especially if you find a great young start up that has huge potential.

To make the most of your investment, here are some tips you should follow:

  • Choose stocks that have a high price-earnings ratio but the price-earnings-growth ratio should be low. Always take your time to think and study before investing.

  • Decide on your entry plans and exit plans and stick to them. Sometimes it may feel like the price will go up even further after it has reached your mark, but it could also go the other way. You have set these limits for a reason and should not forfeit these.

  • Know the trends and go with the flow, swimming upstream will never get you far. As you can’t change the market, you have to go with it and make the best out of any situation.

  • Take your time to analyze and be sure to only use reliable sources. Even if your friend tells you about a stock that he thinks will go up, do your own research as well (unless your friend is an established investment guru, of course). Only use reliable info, official tools and charts. Don’t fall for “inside info” and any “hot tips” that may have been designed to deceive the investors instead of helping them.

  • Spread your risks. Don’t put all your money on one card, it doesn’t work that way. To be a successful trader you need to trade – that is buy and sell different penny stocks and not rely on just one “amazing deal”.

If you keep these tips in mind and start slow, taking your time to think through and research each and every step, you may very well be in for a bright future in investments and stock trade. And a big bonus here is that you may very well keep earning residual income from your stocks for years to come after your last investment and ensure yourself a very nice retiremet.