Penny Stocks, the Road to Riches or Ruin
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(pg. 3)
- Don't believe in claims of inside information. Promoters will try to make you think that they have inside information that will, once disclosed to the public, cause the price of the stock to rise. Trading on insider information is prohibited at law. Usually promoters are not disclosing inside information, but simply false information to get you excited about the stock.
- Do your own research. Look at any recent press releases of the company and take the company at face value. Analyze the company based on existing facts. Ignore any promotion that the company is about to make a great discovery or land a great deal. Look at its prospectus and any other company information that has been files with a securities commission or exchange to determine exactly the type of risky company that you are being lured into.
- Just say no to risky companies. There are plenty of legitimate companies that offer growth without great risk. There is no need to invest in risky ventures when money can be made in strong companies with legitimate products and services.
- Be true to yourself. Know what your tolerance to risk is and how much you are willing to invest and lose. If you invest in a penny stock be prepared to lose everything.
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(pg. 3)