Low Priced Stocks
This is just advice. Invest at your own risk.
Low-priced stocks are those that do not cost much per share but tend to have a really great lookout overall on the stock market. There are other such low-priced stocks, but these are stocks that do not cost much because the company does not fare well in the current economy. These underperforming stocks, however, do not tend to have a great look overall. This type of inexpensive stock you should avoid at all times.
Some examples of low-priced, high-performing stocks are:
- RF Micro Devices Inc. (RFMD)
- American Software, Inc.
- Zarlink Semiconductor, Inc.
RF Micro Devices Inc. shares, as of October 2011, sold on the stock market for $6.81 a share with a 19.97% increase potential. American Software, Inc., as of October 2011, sold for $7.68 a share with a 56.25% increase potential. The daily increase percentages for Zarlink Semiconductor (as of October 2011) were 3.52%, 7.24%, and 92.50%–all good numbers for a stock whose price at the time was $3.85.
Another cheap stock is Paramount Gold and Silver Corporation (PGZ), whose stock was $2.40 a share in September 2011.
Companies are the best group from which to buy stock. Some other well-known companies you should purchase cheap stock from are:
- Bristol-Meyers Squibb Company
- DuPont
- Auto Zone, Inc.
- Eaton Corporation
- Wal-Mart
- Johnson & Johnson
- Kraft Foods Inc.
- Hanes Brands Inc.
- American Eagle Outfitters, Inc.
- Shell
- Chevron Corporation
- American Express Corporation
- Apple, Inc.
- Google, Inc.
- Yahoo, Inc.
- AOL, Inc.
- Union Pacific Corporation
If you buy stocks from companies, do so when the prices are extremely low. Company stocks that are in high demand (technology, gas, credit card, consumer products) will have high performance. The key is to purchase stock when the price is low and affordable.
You can choose to buy stocks online, but there are a few key steps you must remember if you decide to do so. First, you should research to find a good online stock broker whose reputation you trust. Remember that you stand to lose a fortune (whatever the amount) should the broker be found untrustworthy. Money is a serious investment to make and should be done so carefully. If you want to shop in foreign markets, look for a foreign stockbroker. Foreign markets have affordable stocks as well—though you may need to research foreign stocks more than native stocks.
Next, you should give the stockbroker you choose some money that he or she can invest during the day. If you are at work, out of town, or in a business meeting, you cannot keep up with the latest market information. Stocks do fluctuate throughout the day, and some can go from bad to good in a few hours—others go from good to bad. If you want to make the most optimum investments with your money, you must entrust it to a stockbroker who will watch the market every second of the day. The timing of the investment may clash with your schedule, but the stockbroker will be available to secure your money into an excellent market.
You must not only research and investigate trustworthy stockbrokers, but stock companies, as well. If you intend to make an investment in a company on the market, you will need to know something about the financial details of the company. Research online companies, their financial situations, and read reviews to determine how financially well-off or not the company is.
Use a stop order to prevent yourself from losing your stock, should the market in which it is placed head south. A stop order is a form used by a stockholder should he or she notice that a stock will sell below the original price. If your stock was originally for $30 a share, and the stock will now sell for $10 a share, the stop order prevents you from losing your $30. Your stock will still sell for $30—and you will not lose the extra $20 due to the market decline. Stop orders can remain for either one day or “good-until-cancelled”—that is, from the moment the stockholder signs the form until the moment he or she decides to cancel the stop order form.
Some really high-performing cheap stocks are found in penny stock trading. This form of trading involves penny stocks that cost less than $5 and have the potential to sell for more than they cost. Though their price is appealing, they are also high-risk investments that stand to hurt more than company stock investments should they go wrong. You can purchase penny stocks through three types of penny stockbrokers: (1) full service firms, which charge high fees for their commission. Full service firms are paid according to how well your stock performs on the market; for you, this means that they may work hard to get your stock to do well on the market so as to charge you extra money. It is to their benefit to help your stocks soar on the market, because, the more money you make, the more money they make too. (2) Fee-based firms, firms that require a fee for their investment services. Since they are only paid a fixed fee for their services, they will focus more on the growth of your investment for your sake and not for their own. Lastly, there are online discount brokers. Online discount brokers offer their services at the lowest rate of all three brokerage firms, but they do so because they offer fewer services for your investments. Unlike fee-based services, online discount brokers do not offer counseling services when it comes to your money. They require that you possess knowledge of stock markets and investments up-front. This type of brokerage firm, therefore, is left to the knowledgeable stockbroker and not the market novice who has no idea of how to watch the market and bid at certain strategic times.
In the current economy, even stockholders want more for their money. As a result, stocks that are inexpensive yet well-performing are more alluring for financial investments than high-priced stocks that may or may not perform so well. Low-priced stocks grant you the opportunity to take a small risk without experiencing major consequences.