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Penny Stock Investment Newsletters and Advisors - Finding the Best

Investing in penny stocks is always a hot topic. The allure of penny stocks is the sense that you can get a large position without a lot of money, and a price swing of a few cents can result in a large percentage swing. Of course, we all expect that the swings will work out in our favor, so this makes it appear that it can be a quick road to riches.

However, one of the common traits of penny stocks is that by their very nature they aren’t required to make the financial disclosures that companies on the major stock exchanges would be. This opens the whole field up to people who might prey on the unsuspecting.

Many of these are going to be worse than useless, because if it’s fraudulent you loose not only the money that you spent on the advice, but the potentially all the money you invested as well.

Here are just a few the number of different penny stock newsletters and advisors.

Microcap Millionaires

Best Penny Alerts

Penny Stock Secrets

Day Trading Penny Stocks

Profit with Penny Stocks

Stock Market Trading Course

Pink Sheet Picks

Of course the best way to check advisory services is with a tracking service. The best known of all these is the Hulbert Newsletterwhich has been publishing advisory results for over 25 years. Unfortunately many of these newsletters don’t make the cut to get into the major tracking services.

There are too many newsletters out there to track so rather than make specific recommendations here are some things you might want to check before you buy.

Paper trade the recommendations - And be careful to see what the actual trades might be. One common trick some fraudulent operators will use is to give paper recommendations by showing a trade at the closing price one day, and if they recommend a thinly traded stock (which is the majority of penny stocks) and they have enough subscribers, the stock will jump on the day of the trade. So the price increase becomes a self fulfilling prophesy, except that if you tried to trade it the day it’s recommended it can’t be bought at the recommended price. Then they often sell the stock after the initial price jump, this technique is known as “Pump and Dump.”

Where are they based? - It’s possible for advisors outside the US to get away with practices that the SEC would consider fraudulent, but they can’t easily prosecute them since they are in the UK or Australia. We don’t mean to imply that all foreign based services are not genuine, it’s just that the odds are more likely that they could be.

Track Record - Are they showing you the complete list of trades, or just trades that might have been possible, or just a few selected trades they recommended instead of a complete list of all recommendations.

MATERIAL CONNECTION DISCLOSURE: You should assume that the author of this content has an affiliate relationship and/or another material connection to the providers of goods and services mentioned in this content and may be compensated when you purchase from a provider. You should always perform due diligence before buying goods or services from anyone via the Internet or offline.

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