Buying Stocks on the OTC Bulletin Board
Have you ever gotten a flyer in the mail about a penny stock? I get them all the time. They almost all look the same.
If you open them up and read one you’ll find a story of a great stock to buy. They’ll make it sound like they are running a stock picking service of the century and how the stock they are telling you about is going to go up one-hundred fold.
They make it sound like they are doing you a favor telling you this stuff and make you feel like you must get in the stock, because if you don’t it’ll go up without you and make you regret being indecisive.
Almost all of these stocks talked about in flyers like this trade on the penny stock pink sheets stock exchange or on the OTC bulletin board where they are not as regulated as the stocks on the NYSE and Nasdaq.
They do not have to file quarterly reports to the SEC so they just give a limited amount of information out to the public. Many are all smoke and mirrors and frauds and often pay people to tout these stocks. If you get a flyer in the mail about them it’s likely that you are getting a paid promotion.
If that’s the case you need to stay away and if you want to make money in the stock market you need to learn how to buy stocks for yourself.
Watch this video I made and you’ll understand what I mean.
I can help you find the best stocks to buy now for yourself. But even if you know that you still have to manage your brokerage account wisely if you are going to make money and not blow yourself up.
You’ll need to control the risks in your account by owning multiple positions. If you are asking yourself, “how many positions you should I own?” The answer is more than ten. Less than that and you’ll have too much in one position. If you have more than twenty-percent of your account invested in one stock and it goes down it will hurt you too much.
You may also want to use stop loss orders to help you cut any losers before they have a chance to become big losers.
But the first thing you have to do is realize that chasing some story stock in a flyer is not a smart thing to do. I do not care how exciting the story is. You need to have a strategy when it comes to buying and selling stocks.
I use what I call the Two Fold Formula which combines valuation metrics with some simple chart patterns to narrow down the list of stocks I’m looking to buy from the thousands of possibilities out there.
I only look for a specific set of criteria that has worked well for me over the years. You can get the whole thing for in a PDF report I put together about it for you. Just scroll below and take a free membership to this site and I’ll email it to you.