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Who Can You Trust

Before you start researching the penny stock market, it's important to know where to go for the most reliable information. There are very few trustworthy resources out there, but plenty of danger zones to avoid. To help you make wise and informed choices, here's a few useful guidelines to follow.

Avoid Promotional Penny Stock

Some services receive compensation from the companies whose penny stock they promote. This is an obvious conflict of interest. It usually works like this: the promoters tout the penny stock in exchange for shares from the company. The more they can get investors excited, the higher they can drive up the penny stock's price, and the more they personally profit. So whose best interest do they have in mind? Yours? Not likely!

Penny stock companies are constantly being promoted on numerous websites and newsletters. Surprisingly, nearly 75% of these promoters are unscrupulous and out for their own gain. They'll do anything to make money, including exaggerating their track records or blatantly falsifying information to suit their own ends. Be especially wary if the "advice" is being offered for free, such as unsolicited email or fax spam.

In direct contrast to this practice, Penny Stock Insider answers to no one but our subscribers. We don't send out any unsolicited announcements. We maintain a strict arm's length relationship with the companies we profile and receive no compensation from them in any form.

Protect Yourself

It's important to read the fine print published by these services. Also, be sure there is somebody there you can turn to for answers to your questions. If you can't establish a two-way communication with the people offering the services, how can you possibly depend on their advice?

Even though top-notch penny stock services are hard to find, it's in your best interest to seek out the most professional one.

The media recognizes Penny Stock Insider as an expert in the field and contacts us frequently for interviews or quotes. Coverage includes outlets such as the LA Times, CBS MarketWatch, the Associated Press, Yahoo! financial news, Barron's, Equities magazine, NBC, and more.

We want to spread the word about the advantages penny stock investing and the importance of relying on the research provided by reputable people.

If you need help finding the most promising penny stock or if you just want to learn everything you can, we invite you to subscribe and give us a try!

Water Cooler Penny Stock Tips

We've all heard them. The hottest penny stock tip ever and you're lucky enough to be getting in on the ground floor. The advice you get from somebody at work may be sincere and well intentioned, but everybody knows the old adage - "If it sounds too good to be true, it is."

Chances are, by the time something becomes water cooler chatter, it's already spread like a virus, whether based on fact or rumor. There's a big profit in store for those who start penny stock rumors. However, none of those profits will end up in your pocket.

Maybe the best way to protect yourself is to ask the tipster some of these questions:

  1. What do you know about the company's revenues?
  2. How much is their debt load?
  3. How many shares are trading?
  4. Who is the CEO?
  5. What does the competition look like?

Then as you walk away leaving your friend scratching his head, here's a question you'll want to ask yourself:

Is this really the person I want to advise me?

We don't mean to imply that it's absolutely impossible to pick up a good penny stock tip this way. You just need to be aware that more than 9 out of 10 of these rumors will end up costing you money.

Do your own research. If you still feel confident enough to act on the tip, remember that the buck still stops with you. Maybe you'll profit, maybe you won't. If you win, thank your friend, but if your lose, don't blame anyone but yourself.

Beware of Penny Stock Price Predictions

Don't be fooled when a colleague claims that a certain penny stock is going to hit a particular price after some event happens. For example, "XYZ is going to shoot up to $8.50 as soon as that merger is completed."

Your colleague's advice was probably not based on research, but rather picked up as a result of a promoter's rumor mill. The promoter gets the ball rolling and then sits back waiting for the price to spike before he sells.

It's best to ignore any financial advice unless it's based on well-reasoned information and the research and analysis of dozens of accompanying factors.

Always rely on professional services, such as the high-level reports provided to the members at Penny Stock Insider. We have a proven track record of winning penny stock picks, and provide our subscribers with information about the optimal time and price for buying or selling.

However, you will never hear us make guarantees or suggest that a penny stock is going to hit a specific price. We will make recommendations based on our research, but it is illegal to make price guarantees. No one can predict exactly what a penny stock is going to do. The bottom line is that definite price predictions are made either by those with intentions to deceive, or else by the ill informed.

When is a Professional Analyst a Professional?

There is no shortage of penny stock websites boasting of their professional research and analysis expertise. But you might be shocked to learn that many of these websites are actually programmed by teenagers!

It's the naive and inexperienced penny stock investors who fall victims of these false claims. We wish there were ways to stop these fraudulent activities, but unfortunately the situation does not seem to be high on the agendas of regulating bodies.

We hope you'll heed our warning and stay clear of these danger zones. However, should you decide to throw caution to the wind and give these services a try, make sure to follow our guidelines and ask all the right questions before you get in too deep. Then come on back and join us. We promise never to say, "We told you so!"

Penny Stock Message Boards

Without a doubt, the most misleading information we've ever encountered can be found at penny stock message boards. To the individual looking for solid information, we say "stay clear!" You'll not only be wasting your valuable time reading the incorrect and misconstrued comments from those who have nothing useful to offer, you may inadvertently be swayed by some of the things you read.

Instead, we recommend relying on our high quality penny stock picks and research techniques. Make the most of your time.