Buy Penny Stocks The Right Way

| November 23, 2015 | 0 Comments

Want to buy penny stocks the right way?

Work on your patience and sharpen your focus.

It takes a special kind of investor to consistently make money in the market, no matter what kind of stocks you’re trading.

The successful penny stock investor will enjoy more success with the right combination of patience and courage.

These are the two essential ingredients of a great attitude.  And they’re the foundations of profitable penny stock investor psychology.

Don’t Buy Penny Stocks Without Doing Your Homework

Patience pays off.

Take some time to get to know the company you’re looking at.  Don’t accept what anybody has to say about the penny stock without looking at the company for yourself.

You might see some things other people have missed.  Or you might uncover a few embarrassing facts that other people, like the pump and dump scam artists, actually don’t want you to see.

Patience is easy to talk about but it’s tough to demonstrate.  All of us want to think we’re decisive.  None of us want to be viewed by others as indecisive and wishy-washy.

But when you buy penny stocks, the goal is to make money.  The way you’re perceived by others isn’t nearly as important.  Focus on the trade.

Recognize that you have a choice.  You can be decisive, or you can make money by being careful and cautious.

Can you have both?  Sure, and here’s an example.

Decide to be patient and not rush in enthusiastically every time you hear an exciting story.

Stories are how the pump and dump scam artists make money.  Even if you don’t consider yourself particularly creative, I bet you could put together a pretty convincing story about virtually any penny stock you find.

So instead of intoxicating stories, look for solid opportunities.

This is why homework pays off.

Does this strategy work?  Does it help you make more money than a scattershot broad market approach?

It sure does.  Here’s proof you make more money trading penny stocks.

But this kind of success takes focus.

Let face it.  None of us have time to do the kind of extensive, in-depth research that would be 100% perfect.  There’s simply too much going on.

Nobody can possibly cover this much ground, so it’s smart to bring focus to the way you buy penny stocks.

Here’s what I mean.

When You Buy Penny Stocks, Focus On The Business Category

One category of stocks you might want to pay attention to right now is banking.  Not the big global banks, but the small ones, known as community banks.

You might not think a bank would be a penny stock but you’d be surprised.

Want to find the kind of bank that gives you a good penny stock to buy?

Head for the suburbs of Philadelphia.

At Royal Bancshares of Pennsylvania Inc. $RBPAA, assets are growing.  So are loans.  Bad loans are shrinking.  And net income is up.

There’s nothing terribly exciting about Royal.  It’s a small, community bank with 13 branches and two loan offices.  It’s been around since 1963.

Last April, the stock traded at $3.50.  In just a few months, it lost more than half it’s value.

Since last summer, the stock has been clawing its way back, and right now Royal is trading at $2.28.

Royal Bancshares of Pennsylvania Inc.

What makes Royal so interesting?

The same thing that makes a select group of other community bank penny stocks interesting.

They can be very, very profitable.  Let me tell you why.

Why Community Bank Penny Stocks Can Be A Very Smart Buy

Let’s face it.  These penny stocks are boring.  They don’t give the pump and dump promoters exciting stories to tell about changing the world.

But buy one of these stocks below book value, hang onto it, and you can be sitting pretty.

Very pretty.

The financial meltdown that hammered the big global banks… it didn’t exactly bypass the small, community banks.  The small banks were hit with new federal regulations which made doing business tougher.


The survivors are pretty much in good shape.  At many community banks, loan losses are going down.  Deposits are either holding steady or increasing.

When you find a business category like this to focus on, you can start to rank the players.

You might even find a community bank penny stock you like better than Royal Bancshares of Pennsylvania Inc.

If so, terrific.  Because there are a lot of exciting opportunities for penny stock traders in this category.

Just keep in mind that the rising tide doesn’t always lift all boats.

And when one category is doing well, another category is in a slump.

So sharpen your focus.  Maybe it’s homebuilding, maybe it’s retailing.  Look at the world of penny stocks through the prism of an industry category and you’ll identify all sorts of interesting opportunities.

Any categories you’re fired up about?

Let me know.

It would be great to hear from you.  And if you have a question about a stock or investment idea, shoot us an email.  You can also leave us a comment on the website.

(And take your penny stock profits all the way to the bank.)

Good investing…

Brian Kent
Penny Stock Research

Note:  If you’re interested in learning more about Brian Kent’s Penny Stock All-Stars premium service… and learning about the stocks we’re trading for profit… you can get the inside scoop on penny stocks here.


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Category: Penny Stocks

About the Author ()

Brian Kent is the Editor for He also pens Penny Stock All-Stars, an investment advisory focused on discovering small-cap and micro-cap stocks that are destined to become the market's next Blue Chips.

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