How To Begin Investing Your Money

If you’ve been considering investing your money, you might be hesitant, thinking that you need large sums to do so. This simply isn’t true. You can start investing with only a small sum if you do your research and get some help. Read on for a few investment tips and tricks.

Save Up

Your first step in investing your money is saving some money to invest. Put aside a little from each paycheck, tucking some cash away in an envelope and putting it in a drawer so you aren’t tempted to spend it. You might also take a little time to review your budget and look for some expenses you could cut out (like extra cell phone services or streaming subscriptions you rarely use). Then commit that money to investing. You don’t actually need very much to make your first investment. Even $100 or $200 can get you started.

Do Your Research

Of course, you will want to do some research about investing before you take the plunge. Make sure you understand options like the 401(k), IRAs, stocks, bonds, mutual funds and exchange-traded funds (ETFs). Read about how each one works and what is required for investment. Know the benefits and the risks as well. You don’t need to be an expert like Larry Creel partner at Edgewood Management LLC, but you should at least have a good grasp of the basics.

Decide How and Where To Invest

All of this information will help you decide how and where you want to invest your money. First, set some goals. Think about why you want to build your investments. You might be looking toward retirement, in which case a 401(k) through your employer (who will match at least a percentage of your funds) or an IRA might be the right direction. If you’re looking more for an investment that you can draw from to spend for a home or car or vacation, you might look more toward stocks or bonds.

Get Some Help

By now you might be feeling quite overwhelmed by investments and everything to do with them. If so, don’t hesitate to get some help. You might talk to a local financial counselor or stockbroker. You could deal with a reputable trading company as well. Many of them no longer charge commissions on trades, and a broker can guide you into the best options for your needs and budget. You could even try to work through a robo-advisor that helps you build a lost-cost portfolio and automated investing plan. Be aware, though, that robo-advisors charge fees that can add up over time.

Keep Track

Finally, after you make your investments, you will want to monitor them closely, keeping track of gains and losses and making changes as necessary. As you gain more experience, you may want to branch out into other areas of investment. Your goals may change over time, too, so remain flexible, and make your money work for you.

Investment can seem rather frightening at times and certainly stressful, but if you do your homework, invest wisely and get help when you need it, you can find success.

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5 Major Home Projects That Are Worth It

Whether you’re upgrading your home or getting ready to sell, investing in your home can add tremendous value. Revamping your current space can transform any house into a home, but how do you know what’s worthwhile?

Some of these projects can be DIY, but we recommend hiring a home remodeling contractor for the more complex projects. These projects can have unbelievable results when done by an experienced hand, so take advantage of a contractor when you can!

Kitchen Remodel

Renovating an outdated or “traditional” kitchen can go a long way! Most new homebuyers look for more contemporary kitchens when touring a home and can make a sizable difference in the final price of the house. They’re important centerpieces of the home, and having a good modernized kitchen can bring a home together. For homeowners and sellers, updating appliances, resurfacing countertops, and new sinks can go a long way in making your kitchen much more comfortable and valuable.

On average, kitchen remodels can cost roughly $25,000, according to HomeAdvisor.com. Generally, these renovations are usually the most expensive.

Bathroom Remodel

Bathroom remodels are one of the most common remodels a homeowner can take on. If you aren’t planning to move, investing in a bathroom space that best suits your needs and wants is an easy decision. We spend a lot of time in the bathroom, and they should be something comfortable. Removing a bathtub that is rarely used is an easy way to boost the space in a bathroom.

If you’re getting ready to sell, an article by Zillow.com suggests that the return on investment for bathroom remodels is high. The average ROI for a mid-range bathroom remodel is about 70.1%. Most homeowners spend anywhere from $6,000 to $16,000 on bathroom renovations, according to HomeAdvisor.com, and this depends on the size of the bathroom and how much work it needs.

Build a Deck

Adding a deck to your home is a guaranteed way to add value to your home. In addition to adding a new outdoor space to your home, when it comes to selling your home, the addition of a deck can get you around 70-80% of your initial investment. These outside spaces are fantastic for hosting guests during the warm weather months and can be worked around existing pools, hot tubs, and landscaping. Even more, for those not looking to move anytime soon, a customized deck built by professional contractors can be built to your desires.

Depending on the size of your desired deck, you can expect to pay on average between $4,000 and $10,000. In most cases, your price can be determined by square footage.

Landscaping

Landscaping is a guaranteed way to boost the curb appeal of your home. How your home looks from the outside is hugely important to potential buyers since first impressions are everything. Simple projects like new trees, pathways, outdoor lights, and general lawn maintenance can go a long way in boosting the value of your home.

Basement Remodel

Renovating a basement can truly maximize your home’s square footage with new liveable space and is guaranteed to bring value and comfort to your home. When homebuying, people will compare your home to those around it, and the difference between the price of your home can vary if it has a finished basement. To get the best results, finding a reliable contractor is essential. Finished basements can be transformed into any number of spaces, such as offices, play areas, laundry rooms, and entertainment spaces. All of these spaces are guaranteed to add value to your home, and in some cases, make it stand out to potential homebuyers.

To fully finish a basement can cost upwards of $20,000. That price can vary dramatically depending on what you want for your basement, like new walls, removed walls, bathrooms, and more.

Remodels like these can go a long way in making your home life much more comfortable, or they can boost the price of your home if you’re ready to sell. These are investments, some more expensive than others, but all worthwhile in the end. No matter how you decide to renovate your home, we recommend leaving the non-DIY activities to the professionals.

About the Author

Jennifer Bell is a freelance writer, blogger, dog-enthusiast, and avid beachgoer operating out of Southern New Jersey.

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New Developments in Venture Capital

The venture capital industry has been around for a relatively short period of time, but it has already seen profound change. There have been many developments in the venture capital industry in the last few years or so. Newer venture capital firms like Xfund are taking a radically different approach to the firms that have come before. Many newer firms are looking at founders with different educational backgrounds, offering more opportunities to women and people of color, connecting with universities, and mentoring the founders of the businesses they fund. Read on to learn more about new developments in the venture capital industry.

Some Venture Capital Firms are Seeking Founders with a Liberal Arts Background

Traditionally, venture capital firms preferred to work with founders that have an extensive background in computer science. At the very least, venture capital firms used to look for founders that had a business management background. It was often difficult for people who had liberal arts backgrounds to even get meetings with venture capital firms. These days, this is no longer the case.

Founders with liberal arts backgrounds may still have a more challenging time getting funding, especially from older venture capital firms. However, it is now possible for them to get the funding their businesses need. This is especially true when it comes to the newer venture capital firms that are more open to founders from non-traditional backgrounds.

More Women are Getting Funding

In the past, only a small minority of the start-ups that received venture capital funding were founded by women. While the majority of funded start-ups were still founded by men, more female-founded start-ups have been receiving funding from venture capital firms. In fact, many venture capital firms now make a point of looking for female-founded start-ups that they can consider for funding. It should also be noted that many venture capital firms are now hiring women, who may be more receptive to start-ups that were founded by women.

More People of Color are Getting Funding

Just as more female-founded start-ups are receiving funding, more start-ups founded by people of color are getting funded. And with female founders, people of color had reduced access to venture capital firms in the past. While this problem certainly has not been completely solved, things are getting better for people of color who are seeking funding from venture capital firms. Many venture capital firms are making a point of considering start-ups founded by people of color. This is especially true of start-ups created in the last few years.

Many New Venture Capital Firms Have a Connection to a University

Another interesting development in venture capital is that many firms now have a connection to a university. Some universities even have their own venture capital firms. Even venture capital firms who are not officially affiliated with a university often have an agreement in place that allows them to consider start-ups from local institutions students.

Mentorship to Founders

In the past, many venture capital firms simply provided funding and business guidance to founders. However, many newer venture capital firms are also providing personal mentorship to the founders they support. This is more common with venture capital firms that work with very young founders like college students.

The Future of Venture Capital

Recent developments in venture capital mean that the industry will be more inclusive in the future. Women and people of color will have opportunities that they may not have had in the past. Even founders from different educational backgrounds will have venture capital opportunities that they likely would not have had a few years ago.

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A Beginner’s Guide to Property Investment

You may have started to realize that more and more people are talking about investing. This is partly because, due to the pandemic, many people are searching for extra sources of income. However, another factor is the fact that people are realizing how great investments are – by doing research and working wisely, you can turn your money into more money. One of the most popular and effective methods of investing is property investment. But it can be a bit tough to know where to start, which scares people off – after all, we’re talking about spending your money here, so you want to be sure you have all the information before you take the leap.

What is an investment?

As mentioned, investment refers to any money that you put into something with the hopes of getting more out than you put in. Simply put, you invest a bit of money, and over time, that money will either grow or provide some other form of income for you. If it’s something you can afford, it’s a great step to take financially. Investments may also have certain added benefits, especially when it comes to property investments. For example, the 1031 exchange rules could mean that, under the right circumstances, one could exchange one investment property for another, and be exempt from certain types of tax. You can learn more about this by looking at this 1031 exchange rules infographic.

Why property?

There are so many different investments, so why invest your money in property? After all, you could invest in other ventures for much less money. The truth is that property investment is great because of how versatile it is. There are multiple ways in which you can use an investment property to earn more money – but we’ll get to that in a bit. And, of course, you don’t have to spend all your money on the fanciest house. You can easily buy a neglected, run-down house and make a few home improvements to increase its value.

What can you use it for?

Anything you want! Here’s a fun fact – even if you just bought a house for personal use, it’s still an investment, because it’s an asset that you can later sell for a profit. You can buy a house, make a few upgrades, and sell it at a much higher price. Or you can use it as an Airbnb. However, the most popular way of using an investment property is to rent it out. This way, you’ll have an ongoing monthly source of income.

Who should invest in property?

Unfortunately, this investment avenue isn’t for everyone. If you invest in something, you need to still have enough money for all of your bills and necessities. This may not be possible with property investment, especially if you’ve just gotten the property, and are still waiting for renters or improvements. Keep in mind that investing and saving go hand in hand, so if it’s something you truly want but can’t afford just yet, you may be able to save up until you can afford it.

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How do the millionaires trade the Forex Market?

Becoming a millionaire trader in the Forex market is one of the most difficult tasks in the world. Getting access to the retail trading industry is relatively easy but if you do the math, you will realize that the number of successful traders is very low. Most investors start trading financial instruments without having good knowledge of this market. They take trades based on emotions and gut feelings. Eventually, they quit trading after losing a big sum of money.

To become a millionaire, you should learn to think like them. You have to push your limit to the edge and only then you can expect to trade like them. Now let’s see how millionaire traders execute their trades and make tons of money.

Strong analytical knowledge

Millionaire traders are very good at analyzing the market data. They never take their trades without doing proper analysis. If you watch their actions during the trade execution process, you should notice that they are taking the trades based on technical and fundamental analysis. Rookies often think the fundamental analysis is not that important in trading. But fundamental factors are often considered as the most important element as it gives the outlook of the market in the bigger picture. So, learn to analyze technical and fundamental factors of the market and avoid taking any unnecessary risks.

Trading with the best broker

Elite traders in Norway always trade with high-end brokers like Saxo. They know the importance of a professional trading platform. Let’s say that you are very good at analyzing the data. However, due to a technical glitch, you have executed the trade in the wrong place. So, it’s obvious you are going to lose money from that particular trade. But if you chose to trade with a high-end broker like Saxo, you are not going to have that problem. Try to choose your broker very carefully as it will limit your losses.  Most importantly, you should get the perfect tools to analyze critical market data.

Risk management policy

Professional traders are always good at managing risk. They never take high risk in the trades since they know, it can cause them big problems. To keep your fund safe, you should be following a standard approach and look for trade signals with low risk. It’s true, you may earn a huge amount of money by taking a big risk but by doing so, you will risk a big portion of your capital. If the trade goes wrong, you are going to lose a big portion of the capital. So, risk a portion of your trading capital that you can afford to lose. Never take a high risk as it will make things difficult. To know more about the importance risk management technique, you may study the trade history of the successful traders. You will be surprised to see that they never open trades with high risk.

Price action trading strategy

The price action trading strategy is based on the Japanese candlestick pattern.  If you want to earn more money, you need to learn about the price action trading method. The price action trading strategy provides retail traders with the perfect opportunity to find quality trade signals. Most importantly, it helps traders to trade with a tight stop loss. Since the millionaire traders deal with big funds, they need to be extremely cautious about the stop loss.

Chart pattern trading

Highly trained professionals prefer to trade with the major chart pattern as it gives them a better opportunity to secure a big profit by taking the trades during the breakout. On the other hand, rookie traders are always looking to make a profit by taking trades in a minor retracement. To experienced traders, a trend trading strategy is the most effective way to earn money. So, if you want to take trades like a millionaire trader, learn about the major chart pattern and take trades with the key trend. If you intend to trade any reversal, you should be extremely cautious about your risk exposure.

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How to Be a Successful Investor

Are you interested in boosting your net worth? While living below your means and saving as much of each paycheck as possible is a good practice and may even help you build up a modest nest egg, there is more that you will need to do to generate substantial wealth. Money that sits in a checking account generates very little interest, almost a negligible amount, and adding to that sum through working alone will be a slow process, even if you are a well-paid professional. The path to true wealth involves generating passive income, or money that you earn without putting in effort regularly. Invest some of your savings in the stock market, and you will find that your net worth increases while you sleep. Read on to learn how to get started in the world of investing.

Speak to a Professional

If you are brand-new to investing, it can be difficult to know where to begin. Don’t just choose a fund or two and hope for the best: do as much research as you can on your own, then schedule time with a professional who can explain things further. This could be a friend or family member who is well versed in the stock market, the accountant you call each year during tax season or even a prominent venture capitalist with a track record of success, such as Mark Stevens. By getting advice from someone with investing experience and expertise, you will increase your chances of making wise decisions right from the start. If you don’t have anyone in your network who fits the bill, online courses and books which explain the basics of investing can be useful tools. You can also subscribe to daily podcasts and email newsletters that explain the day’s top stories in a way that is easy for anyone to comprehend.

Buy Low, Sell High

This strategy may seem obvious, but it rings true nonetheless. If you look up a particular company’s stock and find that it has fallen in recent weeks or months, you should consider buying a few shares, since market conditions will eventually change and the price will begin to trend upwards again at some point. Once that happens, you will have earned a profit on your initial investment. This assumes, of course, that the company in question has a relatively stable future ahead and is not on the verge of bankruptcy.

The “buy low, sell high” strategy applies in a macro sense beyond individual stocks, as well. In situations when the whole market crashes, such as when COVID-19 was first declared a pandemic in March of 2020, some investors may panic and sell their shares. In the short term, prices are plummeting, and they are afraid of losing everything. It is important to keep in mind, however, that this tactic is shortsighted. Even when the market as a whole suffers a blow and you see your portfolio become less valuable, remember that conditions will inevitably shift. As months pass, those shares will recoup their value, and you will be better off if you do not yield to panic and sell.

Invest in Companies You Believe In

When it comes to purchasing individual stocks, take a look at your own spending habits and those of your friends and family. If you or your acquaintances are loyal to a certain company, chances are, you are not the only ones. That company is doing something right, and it is most likely a safe bet that its stock will be on the rise in the near future. If you are risk-averse, there is nothing wrong with starting small: even buying one share is a good start. Then, as you get more practiced, your confidence will increase and you will eventually be more willing to make medium to large investments. Pay attention to trends in the news, on social media and out in the world to see if you can predict what the next hot item will be.

Getting started in the world of investing may seem intimidating at first, but there is nothing to fear. As with any new skill, it takes time and practice to learn the ropes and get comfortable. Try setting aside just a few hundred dollars at the beginning, and spend plenty of time learning all about the stock market before making your first investment. Remember that you should never invest more money than you are willing to lose, since the market can be unpredictable at times. Do not hesitate to reach if something confuses you or you need help. Many online forums can provide answers to any of your questions, as well as certified public accountants (CPAs) who will be able to share their expertise. Good luck on your investing journey!

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So You Want to Go Public

Whether you’re looking to raise capital, quickly expand, or attract new employees with stock-option programs, opening your company to the IPO process might be the right call. It can be complex and time-consuming, though. Done right, selling your securities publicly can be an incredible lift.

Here is an outline of the steps you’ll need to take in generating your public offerings.

1. Choose an Underwriting Bank

You must select an investment bank to act as the underwriter for your IPO. Your choice must be registered with the Security Exchange Commission (SEC).

This bank will help set the initial offer price and will handle the sale of shares after the IPO is released. Take time to carefully consider your underwriter. You’ll want a bank with a solid reputation and track record of success, but also one with specific industry experience and a wide distribution network of potential investors.

2. Due Diligence

This stage is the most time consuming and bureaucratic in the process. It involves numerous paperwork and filing both between your company and the underwriter as well as with the SEC.

This paperwork amounts to contractual arrangements, registration statements, and underwriter planning documents. This stage highlights the importance of choosing an experienced underwriter as they will be responsible for the filing of much of this paperwork.

3. Set the IPO Price

After all of the due diligence filings, your underwriter will embark on a series of roadshows wherein they market your shares to the investing communities to get a good idea of the potential demand for your IPO. You can think of these as focus groups.

You will then meet with your underwriter to examine the cross-section of these roadshow results, the bulk of market research your underwriter has compiled, and your goals for your company and the IPO fundraising to set a price and the number of shares to be sold.

Be aware that your underwriter will likely push to slightly underprice your IPO at its release and that is not a comment on your potential success, but a proven release strategy.

4. Release the IPO

After SEC approval and final pricing decisions are made, it is time to release your IPO. Initial shares will hit the market at an agreed-upon date.

5. Market Stabilization

Over the next 25 days, your underwriter has the legal authority to manipulate the price of your stock through a variety of strategic moves. These include selling off more shares than originally agreed upon, purchasing shares below value, or locking-up shareholders’ ability to sell off shares.

These moves are made to ensure the best probability of success for the final step, market competition.

6. Transition to Market Competition

After 25 days, the SEC begins its prohibition on price manipulation. At this point, your IPO is released to the wild. You will no longer be valued by your prospectus, instead, the market will drive your value for the buying public.

Offering your IPO can be a lengthy process and certainly comes with some risk. If you take the time to choose the right underwriter, everything about the process will go more smoothly and your chances of succeeding on the public market will increase significantly.

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What to Give Your Investment Enthusiast for the Holidays

Someone in your life got very interested (dare we say: invested) in investing over the course of the last year, and for this holiday season, you want to give them something that says you support and appreciate their new hobby. But what do you get an investor who already has a balanced portfolio?

Here are a few gift ideas for the savvy investor you love:

Investing Books

Investing is something a person can just jump into — but that doesn’t mean they should. Because the investment world is so complex and so fraught with risk, it is much better to learn as much as possible about investing before diving in with real money.

Fortunately, there is a near-uncountable number of resources for beginner investors looking to educate themselves. One of the best ways to help an investor is by providing them with new books that have new perspectives on markets and strategies. A few of the best options to add to your investor’s library include:

• The Intelligent Investor. First published in 1949, the wisdom of this book endures to the modern day. This is considered the bible of investing, and it is a staple for any beginner investor.
• The Essays of Warren Buffett. This book is a curated list of Buffett’s writing, from Berkshire Hathaway shareholder letters to Buffett’s speeches and more.
• Think and Grow Rich. Based on more than 20 years of interviews with America’s wealthiest figures, this book offers insight into the psychology of success.
• The Coffeehouse Investor. If your investor feels intimidated by the stock market, this book makes investing more approachable and applicable to regular, everyday people.

Better Investing Tech

Most investing platforms have some rudimentary tools to make investing easier for their users, but real investors utilize more robust investment tracking programs that provide greater insight into the movement of the market, the health of the portfolio and the greater impacts on personal financial wellbeing. If your investor has been relying on dinky, freemium smartphone apps, you might spring for a more professional investing setup, like Quicken or Investor Junkie.

Investment Art

While securities like stocks and bonds are the most convenient investments for beginner investors, if you have some extra cash, you might consider diversifying your investments with some art. Fine art is a long-term investment; it doesn’t build value overnight, but it can become immensely valuable over a lifetime. You might buy your investor their first great art piece to start a new collection.

Then again, if you are on a tighter budget, you might help them improve their investing space with decorative pieces that recall their new hobby. For example, you can buy a miniature replica of the Wall Street bull sculpture to place beside their computer and remind them of a healthy market.

Financial Games

If you are struggling to appreciate the excitement your investor feels regarding their new pastime, you might try to better understand their experience with a gift that everyone in the family can appreciate: a game. The stock market has influenced a large number of game architects, some of whom have striven to help beginner investors with games that teach investment strategy. Some of the best include:

• Stocks and Bonds. A simple board game that gives players $5,000 and a bevy of fictional stocks, this game is a bit more like gambling than actual investing — but it is no less fun.
• Millionary. Best reserved for the most experienced board game players and the most intense investors, Millionary is a gigantic and complex game that uses real companies as mechanics. Though the rules are written in German, English translations are available online.
• Wall Street Survivor. This video game is more like investor training, with $100,000 of virtual cash and countless tools and resources for determining which in-game stocks are worth your money.

Gold, Silver, Cash

An investor’s biggest and brightest dream is to be wealthy beyond imagination. Though you can’t make your investor better at investments, you can give their wealth a boost in the form of gold, silver or some extra cash. Both gold and silver can come in coins, bars or jewelry, all of which are fun to unwrap and show off. You might also consider giving your investor the gift of Bitcoin or some other lucrative cryptocurrency. Most of these options are pretty significant investments, so you might need to save up to give them.

It isn’t uncommon for people of a certain age to become infatuated with the idea of investing. It’s true: Investments can radically increase earnings and improve lifestyles — but only if the right investments are made at the right time. You can encourage the investor in your life with any of these gifts related to their hobby, or you can give them the gift of your unwavering love and support as they navigate this new and complicated world.

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Is the Stock Market Heading for a Top?

Is the stock market heading for a top?  Many folks are interested in stocks to buy, but are worried we may be heading for a top.  Read on in the article to learn tips for picking a stock and to see if we’re heading for a top.

First Things First

If you’re going to be investing the in the stock market, first things first.  Only invest with money you can afford to lose.  You should assume if you’re investing that your money will be locked up for five years or more!  The last thing you want to have happen is for a stock you own to go down in trading price the minute you need to sell it to pay for an emergency!

Picking Stocks is Not for Everyone

Warren Buffet – one of the most famous investors – says that most people like you and me should invest in low-cost stock market index funds.  They are easy to understand – and they are set it and forget it.  So, if you’re looking for something simple, look no further.  Purchase SPY and move on!

Still Interested in Picking Stocks?

If you are looking for larger returns and are willing to take on larger risk of a downturn, then picking stocks could be for you.  Some of the biggest returns you can imagine come from folks who picked their own stocks.  Just imagine purchasing Netflix in its early days.  It is up 26,450%!  A $5,000 investment years ago could be worth over 13 million dollars today!  Do I have your attention?

OK – here are a couple simple tips for picking stocks to buy:

1. Check your emotions at the door – investing isn’t for the faint of heart.  Ensure you won’t sell the moment the stock dips in value.
2. Pick a good company – not just a good stock symbol.
3. Know your risk tolerance – how much of downturn can you stomach before you panic sell?
4. Invest gradually – not put all your money into one company and all at once.  Spread it out over time.
5. Avoid over-active trading – you are NOT a day trader!  Repeat that phrase after me!

What About the Stock Market Being at an All-Time High?

You might be wondering why we’re writing an article about picking stocks when some are saying we’re getting ready for a crash.  The truth is, no one knows when the market will make the next correction (go down).  I remember folks talking about the market going to go down in 2013 right after a big announcement from Janet Yellen.  Image how much gain you would have missed out on if you would have been waiting for that dip these past 7 years!

So, don’t let the idea that the market is at an all-time high deter you from investing.  No one knows what the future holds, or how much higher the market could go.  Simply invest a bit each month, and don’t worry about it.  When you’re ready to retire down the road, you’ll be glad you invested!

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When you’ve determined it’s the right time to try your hand at investing in stocks and other securities, you may want to learn more about OTC stocks as an option. OTC stocks, commonly referred to as penny stocks, are securities that are not part of a major stock exchange. OTC stocks give buyers and sellers the opportunity to have closer communication, although there is some inherent risk involved in trading in OTC stocks because this market has fewer regulations. Learn more about how to make money with OTC stocks.

Trade With Profitable Businesses

Image via Flickr by mikecohen1872

It may sound basic, but when you’re in the middle of investing, there is a lot that can happen. Some stocks move quickly within a trading day. This can be overwhelming and make you feel as if you have to move quickly too, but it’s crucial that you take a moment to evaluate your options and make sure that your investment is sound. You don’t want to be caught up in the bustle of trading, especially with a business that isn’t as profitable as you need it to be to make your own profit.

While there are ways to predict market performance, these all boil down to speculation. If you don’t have much money to invest, can’t stand to lose too much of your investment, or aren’t ready to take on a lot of risk, then your best bet may be to stick with something that’s more sure, even if it takes more time to find financial success with your choices.

Diversify Your OTC Stocks

There is no set rule on how many OTC stocks you should own or continue to watch, and it largely depends on how comfortable you feel in the market, plus how much risk you’re willing to have. There are various schools of thought, but the consensus is to stay with at least 10 stocks, although some experts agree that the more you buy, the better. The reason for diversification is that there is more risk and reward to ponder with OTC stocks versus larger stock exchange stocks.

Evaluate Financial Strength

Most companies selling OTC stocks are there because they are too small to be in the larger stock market like the NYSE and NASDAQ. This isn’t necessarily a bad thing or reflective of their financial strength. It could simply be because the company is newer. It’s essential to understand a company’s balance sheet, so you have a better idea of how secure investing with them should be. Ask for their financial statements and analyze their long-term debts (LTD) to make sure they’re at an appropriate level.

OTC Stock Purchasing Tips

Follow these general tips when purchasing OTC stocks:

• Watch the stock before you purchase to understand its volatility.
• Purchase OTC stocks that are priced higher than 50 cents per share.
• Stick with stocks that have a high trading volume.
• Be prepared to sell your OTC stocks quickly.

OTC stocks are a viable way of making money in the market as long as you are careful and understand them a little more. Start small to get the hang of it, then invest more once you feel comfortable.

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