What Are The Small Caps To Trade

What are the hot stocks to invest in? For most people, they base the answer to that question on hot tips they have received by others who they think is more in tune with the market. Its a simple way to pick stocks. Its also a simple way to lose money.

You wouldn't buy some land in Florida or bet on a horse simply because some guy in your office says its a sure bet. So why would you do it trading stocks? The problem for most people is that there is so much information available, its a challenge to make a decision one way or the other. Based on fundamentals? Based on intuition? Do you buy based on charts?

Sometimes, its a combination of all 3.

Its surprising how many people have asked me to invest their $500, pick a penny stocks, and give them a shout when its worth $10 000 the following week. It just doesn't work that way. Anyone who tells you that, is trying to fool you. To quote Gordon Gekko - "a fool and his money should never have been together in the first place". So unless you are a fool, in which case, hand over your $500 and I'll give you a call when its $10k, do yourself a favor, and educate yourself a bit about trading.

Learning about stocks doesn't have to be difficult. You just have to know what you're looking for. What type of trading style matches your ability to trade and your willingness to risk your hard earned cash.

While penny stocks will give you the biggest reward, its also matched by the biggest risk. Trading futures will give you even more of a return, but you risk much more. Blue chip lowers your risk and provides lower returns. Scalping, momentum and day trading all require you to be glued to your monitor. There's good money to be made doing it, but, you need to sit in front of your computer each and every day, ready to sell or buy when conditions are right.

So what is the best stock to invest in? The answer changes every day, and for the most part, it depends on what level of risk you want to take on. Remember, there are tens of thousands of publicly traded companies out there. Once you figure out what type of investor you are, you'll narrow that list down significantly until you find the right trading opportunity for you.