Thread: Ask a Broker
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Old 02-18-2004, 03:29 PM   #43 (permalink)
Daval
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Quote:
Originally posted by eribrav
I use Ameritrade (former Datek) and you can borrow stocks to short with them just like any other broker.

I have to jump on the bandwagon and say, if you have $2000 and are trading penny stocks, you'd be better off getting on a plane to Vegas and blowing it on a fun weekend. Do you have a safety fund set up in case of job loss, accident, unexpected expense? If not, that would be a much better use of your hard earned and saved dollars. If you do, then take a position in an S&P index type fund and let that be your first investment.Have you ever thought about the risk-reward ratio in trading those penny issues? Let's say they're not good. Wait until you're in a stronger financial position before you trade. When you get there, if you want to swing or position (or even intra-day) trade, start by paper trading first. Why throw hard earned money away without showing you have the ability to be profitable first?

Best wishes and good investing

I do have the vast bulk of my savings in various mutual funds - both RRSP and non-RRSP's (401k for you americans).

The $2000 that I put into my webbroker account is what I felt I could afford to play with, and afford to lose. So if I lost it all, although I'm sure it would sting - life would go on, mortgage would be paid and family would be fed.

I did start on paper, and I still do with stocks I'm watching, I set up a phantom portfolio and try and track it. I am new at all this though.

What i've been doing up till now is just swing trades, buying about 10,000 shares of a stock that appears to have a regular daily or weekly high or low and then sell after i've made 0.01 or 0.02 cents profit.

What else should I be doing?
I'm just tired of making low returns on my money in the mutual funds and want to earn a bit more in the market trading.

What are penny stocks good for? When should they be looked at - or is the correct answer 'never'? I would love to be involved in the big boy stocks, and I do try and follow them, but with the amount I have to invest with, the commissions would erase any profits.

I appreciate all of your advice.
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