Here's An Investment Strategy Designed to Create Wealth for You

Discover The Secret To Consistent Stock Market Profits

How To Day Trade For A Living

CandleStick Analysis Explained

Stock market Trade Secrets They Would Rather You Not Know

Predict Market Turning Points Using Fibonacci Analysis

What is your investment strategy?

A sound investment strategy is based on eliminating debt that may be eating into your monthly cash flow in the form of interest and fees.

Once you have paid down your consumer debt, build up a nest egg of cash in the form of certificate of deposits (CD) that represent at least six month’s worth of your living expenses.

Okay, I have a CD that earns me about 3% per year. That stinks worse than a diluted penny stock. 3% is simply not enough to cover inflation. So why have a CD? I like the safety of a CD, which in my opinion is its only advantage over stocks.

At this point you are ready to buy stocks…

…hold on a second. Don’t rush into the penny stock market with everything you got.

Are trade strategies and stock research important? Read about my $4,242.93 mistake before you answer that.

A more effective investment strategy is to use size positioning to allocate about 80% of your portfolio value in blue chip stocks or solid Exchange Traded Funds (ETFs). Once this is in place, use the remaining 20% of your portfolio to speculate in high risk—high reward penny stock trades.

Now the stock market also poses a problem, because mutual funds average a 4.8% percent return per year, and the S&P 500 has historically averaged 12%. This doesn't even take into consideration the risk of a market downturn. So you are not looking for wealth creation here—just wealth preservation.

So, how can you create wealth?

I have kept my CD in place for safety, and recently purchased a little income producing real estate—which is a whole new world from stocks. As for stock, I have the bulk of my portfolio in SPY, which is the S&P exchange traded fund. ETFs are like mutual funds without the mutual fund fees.

The remainder of my portfolio is in penny stocks. I know, penny stocks are risky--and that's the point. I feel this relatively small portion of my financial assets is expendable. I can risk its loss without wiping me out financially.

That doesn’t mean I trade in penny stocks to lose money. That is not a part of my investment strategy at all. What I want to do is make speculative trades where the potential payoff substantially outweighs the risk. This is what creates wealth.

The key with penny stocks is to find the right stocks to trade, and then monitor those stocks daily with technical analysis and various penny stock chat room commentary.

I don't take the advice of chat rooms seriously, but I do use it to see if other chatters have heard or learned anything about a stock that I may have overlooked.

So, here's my investment strategy:

• Be as debt free as possible.
• Maintain at least 6 months' worth of living expenses in a CD.
• Build up a stock portfolio where about 80% of your investments are in solid, safe stocks, like an ETF.
• Use the remaining 20% of your portfolio to speculate on potentially high return value stocks. This is where penny stocks come into play.

Please note that penny stocks represent the end of a long tail in my investments. These are the keys to long-term financial success and form the basis to my investment strategy:

• Only trade with money you can afford to lose.
• Have a cash nest egg built up that is separate from your stock investing.
• Make some investments in things like real estate to hedge against inflation.
• Make sound trades based on research.
• Move your penny stock winnings into more conservative investments (ETFs, real estate, CDs)

Good luck, and always conduct due diligence on your trades prior to execution.

Is It Possible To Consistently Double My Money In Penny Stocks?

While it is possible, this trading strategy is admittedly a low probability play for the penny stock trader. But, the fact that Doublingstocks is possible, presents and intriguing and potentially highly profitable investment idea. You can increase your oddds of success with Doublingstocks.

Check Out My Other Rules of Penny Stock Trading

My first rule for successful penny stock trading is not to lose money. This sounds easy enough, but is much more difficult in practice. Click here to read how I apply my “Don’t Lose Money” rule.

We’re all greedy to a certain extent, otherwise we wouldn’t be running around trying to figure out how to make in the stock market. The trick to making money, rather than losing it, comes down to setting limits—even on your profit goals. Don’t get greedy. Click here to read my take on how to avoid getting slaughtered like a pig.Click here to read my take on how to avoid getting slaughtered like a pig.

Penny stocks are volatile and speculative in nature. When you combine that with faulty research, you are cooking up a recipe for disaster. Always Research Your Trades, prior to hitting the execute buy button. Click here to get an overview of why I think research is important.

Click here to get an overview of NASDAQ OTC stock market investing. Any investment strategy should include penny stocks. Check out my homepage here.