Chapter 3: Your Broker Set Up - The Problem
The problem with this type of broker is quite obvious. You will not know first hand where the stockbrokers loyalty lies. Therefore, will he sell you a stock that is not doing well? Does he know a stock you own will be doing better in the future and therefore wants to sell it to you? Of course we can not say for sure that a stockbroker will do this or even that he will not. The bottom line is, though, if you are in the business of penny stock investing, you need to know whos behind you.
Many penny stocks are traded in the way of principal stock brokers. Although this does not necessarily have to be a bad thing, it is important to know that it could potentially be there. There may be a conflict of interest in the way of the stock broker and you should know about it before hand.
It is the fact that you have to take into account the cost of your trade as well as other factors.
Small Cap Stocks Picks
By saying that it is risky, that means that it is more likely that the stock could lose ground.
They are affordable ways to invest in stocks in a virtually unknown company. Also, make sure to read through the confirmation to insure that your information is accurate. This lets you easily track what is happening with the stock that you have purchased.
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