Time To Sell Penny Stocks PDF Print E-mail
Written by George Priestley   
Monday, 01 November 2010 11:08
Penny Stocks can be a very effective way to provide you with a secondary income. They can be used to create passive income because they do not require you to be constantly watching over them. The problem that most people have when it comes to stocks is - not knowing the right time to sell.
by GeorgePriestley


Penny Stocks can be a very effective way to provide you with a secondary income. They can be used to create passive income because they do not require you to be constantly watching over them. The problem that most people have when it comes to stocks is - not knowing the right time to sell.

Penny Stocks can rise very quickly but they can also fall quickly too. The reason that most investors hold onto a stock is because the fail to separate their emotions from their actions.

All of your penny stocks buying and selling should, of course, be based on sound research both of the market and the companies' recent history. How the company is doing in terms of profitability, whether they are just about to, or have just announced profits, losses or new patents, discoveries and products, can all affect your decision on whether, or not, to buy.

Knowing the right time to sell your penny stocks however can sometimes seem, as much an art as a science, although getting it wrong can be fatal. Many people seem to put all their research efforts into knowing what penny stocks to buy and when to buy them.

Backers appear to forget researching to sell stocks. Instead, they let their feelings assume control and sell at the wrong time. Backers selling at the wrong time fall into 2 classes. These classes are, The Runners and The Sitters.

The Runners like to take profit way too early. They see their Penny Stocks rise a little and sell because they don't want to "risk too much". I've seen it time and time again; these people set out to earn a 25% Return on Investment and end up taking profit at 1%. Someone who takes profit twice at 25% earns a lot more than someone who takes profit twice at 1%. Usually, as soon as they sell a penny stock, it will rise even further and they'll be wondering why they sold so early.

The Sitters are the heavily emotionally concerned in their penny stocks. They're gamblers at heart and just don't want to let go of a losing position as it could bounce back any day now. When they do let go of their Penny Stocks - there's almost nothing left. The sitters like to sit on a losing position. They like purchasing but detest selling.

Would you like to be a Runner or a Sitter? Well, I am hoping you are neither. You would like to be a winner. A winner will separate their feelings from their investment thinking and will also research when purchasing and also when selling. They are going to buy and they're not scared of selling.

There's serious amount of profit to be made of trading in Penny Stocks. But you've really got to know not only what to buy but also how long to keep it and when the most suitable time to sell. The answer, as with many things in the world of finance, is good info and research. But that does not end when you purchase. Learn why your penny stocks are rising and this could put you in a better position to understand when to sell.

DISCLAIMER: This article is provided as information only and is not to be taken as financial advice.

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