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When Should I Cash Out on My Penny Stock Investment?

Investing in penny stocks can mean it takes awhile to make substantial gains where you’re interested in cashing out of your investment. Some shady brokers won’t even speak to an investor if they find out they’re hoping to cash out of their penny stock investment.

As an investor in penny stocks, you’ll want to watch your trades and see when is a good time to cash out so that you benefit the most from your timing. You have to consider the timing and watch the penny stock closely because if you wait too long, the investment could turn south and the stock’s value could lose points considerably.

Instead of selling off your entire penny stock investment, if you need the money a cash out will bring you, try to only cash out on a smaller percentage of your holdings. That way, if the stock’s value is still on the rise, you won’t lose out on the potential gains.

Some investors cash out based purely on their emotions. They may be worried that the stock is about to crash and then panic and sell out too soon. Or, they could believe their fortune in penny stocks has been too good, so they cash out to avoid anything bad from happening.

Try to keep your emotions in check and cash out only based on what you know for sure. Let the performance of the stock to date speak for itself and consider any news about the company that you’ve learned since you originally purchased the stocks.

When you do cash out, take your original investment and re-invest it, enjoying your profits that were gained from the first penny stock investment you succeeded at. Or, take the profits you made and re-invest them so that if you lose anything on your second investment, you’re not cashing out with less than you originally started with.

If you’ve done really well in your penny stock investments, make sure that you don’t just jump into a second investment without thinking about which company you’re choosing first. You want to take the same care that you took the first time around so that your rewards will equal or exceed the first gains.

If lady luck isn’t on your side and you don’t cash out and miss the boat to big profits, evaluate the life of the investment and see where it went wrong. Knowing why your penny stock investment caused you to lose money will help you avoid the same mishap in subsequent investments.

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