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.
Remember, you can do well with penny stocks by starting with learning about the bad first.
Penny Stock Fortunes
Nevertheless, this is a cost to take into consideration.
Learning this will allow you to analyze how feasible and realistic the company actually is in your eyes. Likewise, you have more of an ability to gain hugely than you would with a safer stock. Make sure that your broker is doing both the buying and selling speech.
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