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Very Low Volume Stocks
without a lot of trading , the stock is very difficult to buy and sell at the price you want. It's almost impossible to know the fair valuations of these stocks, or know where the stock is headed.
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The Phone Salesman
The companies that are doing good dont need to resort to such tactics to sell their stock. Anyone selling stocks over the phone should not be trusted. We are not saying they are dishonest just that you should not trust anyone you don't know. If they say you need to buy right away or that time is short them be very carefull. They will tell you very believable arguments on way you should buy, but do your own research first.
The Sinking ship
Most stocks when they go down in price do come back up. With penny stocks some times they just keep going down. You must have the knowledge to know if it is a temporary situation or if it is something that could keep the stock down.
Warrants And Rights
These are not really stocks at all, they are derivative investments based on an underlying company's shares. They do show up on the stock page so they can be mistaken for a stock, but your broker would let you know before you tried to buy one.
Guaranteed Performance
No one can guarantee a stocks performance. The only thing that is certain in the stock market is that nothing is certain. The only people that tell you a stock can't fail are the ones who will make money if you buy it. Useually these people are promoters or self-serving brokers.
