Investing for Broke Folks: 5 Tips to Find Great Cheap Stocks 1

Melissa is a mother of 2, lives in Utah, and writes for a multitude of sites. She is currently the EIC of HarcourtHealth.com and writes about health, wellness, and business topics.

Cheap stocks get a bad rap.

There are some good reasons why cheap stocks have often been used for pump and dump schemes. Including one infamous scheme which was the inspiration for the movie The Wolf of WallStreet.

But gone are the days when buying an inexpensive stock meant being ripped off. With new safeguards in place, it’s incredibly easy to buy an inexpensive stock and know your getting quality.

Cheap stocks provide an amazing gateway for young and inexperienced investors to enter the market. If you want to start your investment journey then check our tips to help you stay safe when buying stocks.

1. Know the Right Places to Look

The only way to know how to find stocks to invest in is to the right places to search.

For financial news, you can’t go wrong with the Wall Street Journal. Their chart Money Flows Buying On Weakness chart lets you see a snapshot of the best and worst performing stocks. Because this list refreshes every 15 minutes it gives you a great general overview of the market.

Some other places to find great cheap stocks are Analyst Downgrades and 52 Week Low List.

This advice also applies to really inexpensive stocks. Even if the stock you’re buying stocks under $1 there are even places that specialize in researching and providing you the best stocks to purchase.

2. Be Aware of Volatility

It’s common to always think that volatility is always bad but keep in mind that a little bit is good for your investment portfolio. Having an interesting portfolio requires you to have a small amount of your portfolio dedicated to risky investments.

As a rule, avoid volatility in most of your stocks.

3. Research Your Stock Screener

Now you might be asking what is a stock screener. This function allows you to sort and search stocks based on whatever criteria you want.

These come in a variety of forms from personal apps to free platforms like Yahoo Finance and CNBC stock screener. A good rule of thumb is the more upscale screeners will provide a variety of customizations.

A good baseline criteria to add is the annual sales growth percentage. You can also filter for things like market capitalization, volatility, and volume.

4. Be Aware of Catalysts Will Impact Your Stocks

If an event happens and might affect the price of stocks you need to be aware.

Read financial news and be aware of politics and how they will impact the stocks that you’ve purchased.

5. Look at Companies Past Performance

Unfortunately, there no crystal balls when it comes to stocks the only way we have to tell the future is by looking at past performance. If you want to see how your affordable stocks will perform look closely at the companies past and especially at their growth.

Improve Your Finances in 2019

Now that you’ve started on the road to investment with cheap stocks get ready for a financially fruitful year. If you want to turn your financial situation around this 2019 then check out our business blog.