Free From Broke

A Personal Finance Blog for Regular Folks

Investing

Why You Should Avoid Penny Stocks

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Have you ever received a random email touting the benefits of a company or its recent business success?

How many times have you been on a financial forum and seen some random posts about a stock that is “poised to see explosive growth” or some other crazy claim?

Or have you ever used a stock screener to find an attractive stock, but were shocked to see the share price was only 10 cents?

Whether you knew it or not you were being prospected for penny stocks.  These dangerous stocks are deployed by scammers to steal money from you, but can be confusing to understand.

Avoid Penny Stock Scams

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Investment Strategies During a Bear Market

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As an investor, you might have heard of a bear market.

This is actually a market condition wherein the prices of securities are falling.  There is widespread pessimism within investors about the market.  Because of this negative feeling, investors would continue to sell due to the anticipation of losses.

This only leads to growing pessimism.

Despite this fact, there are still ways to make money from a bear market; or at the very least not to lose money from investments.

Before going into that, you have to completely understand what a bear market really is.

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5 Tips for Increasing Your Investment Returns

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We all want to see better returns on our investments.

Whether you are building an income portfolio and want to, eventually, make it work for you in terms of viable revenue, or whether you are just hoping for decent returns for the long-term, what you do now can make a difference later.

If you want to see better investment returns, here are some things to keep in mind to boost returns over time:

1. Don’t Give in to Knee Jerk Reactions

One of the worst things you can do for your investment portfolio is to give in to knee jerk reactions.

It’s easy to let panic drive you into abandoning some part of your investment strategy.  However, this can be a terrible idea.
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What are the Different Stock Market Exchanges?

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The stock markets are often referred to as “the stock market”, as if it’s a single unified market.

The reality is that nothing could be further from the truth.

What we refer to as the stock market is actually a collection of markets, some domestic, some foreign.

What are the various stock markets, and why are they different?

The New York Stock Exchange, or NYSE

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Using a Roth IRA as an Emergency Fund – Pros and Cons

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Roth IRAs are by far my favorite type of investment holding account available.

I love the idea of setting aside $5,000 in after-tax money in order to never pay taxes on the amount ever again.

There are other perks to using a Roth IRA besides never paying income tax on your nest egg.  One of the most prominent: you can withdraw your contributions at any time, even before retirement.  (This isn’t recommended, of course, but it is possible.)  You won’t pay any penalty or taxes for withdrawing your contributions under normal situations.  You will pay tax and penalties if you withdraw your investment earnings, so never do this.

This unique withdrawal capability has some people counting on their Roth IRAs as an emergency fund.

But is this a wise choice or a fool’s gamble?

Should I Use My Roth IRA as an Emergency Fund?

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