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These days getting great returns on your investment is possible without large sums of money and long investment horizons. This is when you purchase penny stocks online and make insane profits. Shares of stocks in these companies are available for less than 5 bucks over-the-counter or via Pink Sheets. If you are looking for superlative gains of 75-250% in a smaller timeframe of a few months penny stocks are a good bet.

Whats the best way to daytrade penny stocks? There are several rules you can follow to pick the best of the best microcap stocks.

Financial statements that are audited by a third-party accounting firm is where you should begin. The profits on the bottom line are valuable but just looking at that would be shortsighted. You never know who to trust when it comes to the smaller companies that aren’t as well regulated as the larger firms on the bigger exchanges. You have to keep track of the growth story too. You need to know why the company is doing well, what their competitive advantage is and how they will keep it going in the short run atleast.

2- The management team is very important to the company’s future. Know all that you can about them. Would you trust them with your money? Have they succeeded in the past and what is their motivation? Are they ethical?. These answers will help you figure out whether you are ready to buy penny stocks.

3) Of course you will have to do some PE or Price to Earnings calculations. This is one of the basic tenets of stock investing. Comparing the PE value of your penny stock company to the PE of the entire sector will help you figure out the valuation. Dont worry. It might seem difficult at first. But with some practice, you will become a pro at this.

The above are the starting points. When its time to pull the trigger and buy or sell the stock, you should keep in mind the shape of the whole economy. The trend is your friend. Know whether you are in a bear, bull or sideways market.

Increase Self Confidence

Would you be willing to bet $300 of your own money that your home is worth what you think it is? Unless you’re ultra-competitive and will bet on pretty much anything, my guess is your answer would be a resounding “No!”

When you go to buy a home, or refinance your existing home, that’s exactly what you’ll be doing in most cases. This is one of the lesser known and most common mortgage ripoffs that occur because people outside the industry don’t know better. Knowing this and other mortgage financing secrets can save you hundreds or even thousands of dollars.

Purchasing a home, unless you’re independently wealthy, involves borrowing the majority of the purchase price from a lender, typically a bank. Before the lender will give you the money, they’re going to want some assurance that the property you’re going to buy is worth at least that much money, and in most cases more. It’s unusual these days to find any lender that will give you 100% of the value of a property. It’s typically 15-20% now. A far cry from the wild and woolly days before the mortgage market crash!

So, let’s say you want to buy a house. You go out and find the perfect house. You and the seller haggle back and forth and settle on a price of $100,000, just to keep the math simple.

Now you go find a lender and ask them to give you a mortgage. They tell you “Okay, we’ll give you $80,000.” You’re okay with that, so you proceed with the mortgage application.

As part of the mortgage application process, the lender will require an appraisal of the property. The appraisal must be done by a certified professional appraiser. The lender isn’t going to take the owner’s word for it!

Typically, the lender schedules the appraiser’s visit. The appraiser calls the property owner and arranges to visit the property. You, the applicant, are required to pay for the appraisal before it can take place. In my area, this fee is generally around $300.

So, you’ve now paid $300 to have the property appraised. If the appraiser agrees that the property is worth at least $100,000, no problem. The application process moves forward.

What if the appraiser says the property is worth less than $100,000?

Ready…?

You don’t get the loan, and, worse, you don’t get your $300 back! You just bet $300 and lost!

Lenders have been doing this for years and it’s become accepted as a way of doing business. People simply suck it up, pay the $300 and hope for the best. In recent years when property values were rising rapidly, this was rarely a problem, unless the seller had ridiculous expectations and the buyer no clue about the real value of the property. Nowadays, however, property values are declining and it’s much less certain that the seller, however well intentioned, really knows the value of their property.

Some reputable mortgage brokers have adopted a policy of paying for the appraisal out of their own pockets. This puts the onus on them to do their homework and have a good knowledge of the current property values in their area. From their perspective, it eliminates the possibility that they would have to call a potential customer and tell them they just blew $300.

The buyer will pay the appraisal fee as part of the normal closing costs, so it’s not like they don’t have the obligation to pay it. With the broker paying the fee first, this eliminates the risk on the part of the buyer and is simply good customer service. Shop around for mortgage lenders and brokers and always ask them who pays the appraisal fee!

This is just one of today’s money secrets that can help you navigate the rubble of the mortgage industry without getting scammed!

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