TGL WHAAAAAAAT! Alerts, thoughts, discussion. Message Board

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Microcap & Penny Stocks : TGL WHAAAAAAAT! Alerts, thoughts, discussion.

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To: SSP who wrote (1190)	6/21/1999 1:36:00 AM
From: Jim Bishop	Read Replies (1) of 150070

Some interesting small cap investing rules from analystgroup.com. Rule # 1 - Generally you shouldn't invest more than $10,000 into any one micro-cap stock. These stocks are speculative sometime, and thus contain some degree of risk. Besides, even a small investment can pay off significantly due to the large price movements of micro-cap stocks. Rule # 2 - Keep a portion of your portfolio in cash. A 20-30% cash position enables you to respond to price movements and news with strategies such as averaging down or diversification. A dynamic portfolio can greatly improve your returns. Rule # 3 - Sell when you've made good profits. Too often investors hold on to a stock that has multiplied several times in value, hoping for an even greater rise. If you must hold on to shares for the long haul, then it is a good strategy to sell part of your holdings like half when the price has doubled, and let the rest ride for the longer term. Rule # 4 - Don't sell from panic. Penny stocks are very volatile, and can rise or fall greatly within days or hours. Also understand that if you can't tolerate any degree of risk or volatility, then more conventional investments such as mutual funds, bonds and money market may be more appropriate for you. However, with right guidance risk levels may not be greater than those found on the conventional stock markets. Rule # 5 - Give yourself a powerful advantage by doing your own research. Rule # 6 - Have fun and be happy. Micro-cap stock investing is much more exciting than any other types of investing, as the potential rewards are greater and will come more quickly.

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