The Hot Tip Stock - There are actually professional promoters who make a very good living generating and nurturing rumors about some penny stock that s guaranteed to go through the roof. The entire concept hinges on the rumor being spread from person to person, at the office, over the phone, or at social venues. The promotional ploys can be very costly for investors who get involved without special knowledge about the company or the actions of the promoter. In most cases if a share's price is really going through the roof you won t hear a word about it, because a select few individuals will be very intent on keeping the information to themselves. Guaranteed Performance - If an investment is guaranteed to go up, it will almost always go down.
Nothing is ever certain, especially on the market.
When someone guarantees certain performance out of a stock, they may be a promoter, naive investor, self-serving broker, or have heard the guarantee from another source. In any case, don't believe them. Instead check into the company yourself and if you feel it is a good investment, you may want to proceed. Especially with penny stocks, you need to avoid this type of thinking because many sinking ships don t ever rebound, and they can go lower , and they aren t good bargains just because they cost less than before. Either way, they take their own invisible commission from you, either by selling to you for an arbitrary amount which is unfairly high, or selling to you for the asking price rather than the bid price based on their own current valuations.