From researching I have found I need to open a cash account with a brokerage firm to start penny stock investing is this correct?

If you are old enough, you can open a cash account at an internet brokerage firm like, ScottTrade, Ameritrade, Fidelity, etc. their minimums may be as low as $2000 to $10,000. Then once your check has cleared you will have acces to buy any stock of your choice. I will tell you that "penny stocks" (those selling for less than $5 per share) are extremely risky and while you could make incredible gains of 50% or more, you could also lose half or nearly all of your money too. You do not have to buy penny stocks simply because you have little money to invest. With low resources the better thing to do is buy less shares (even 1-10) of a quality company and learn what you are doing first. Build up your account by continually adding to the principle. Every one thinks they are aggressive till their account falls by 20% or more!

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Every investor and potential investor needs to take his personal situation into consideration and use that information to set financial goals for a specific time frame (meaning the time when the money invested will be needed for something else, such as retirement).

Then, pick the types of investment that will best meet these goals.

In simplified terms, this means an analysis of risk vs reward. Not having adequate diversity is very risky for almost every type of investment. Different methods of achieving diversity are available, depending on the total amount of money involved with each transaction.

Not matching the risk / reward analysis with the proper time frame is one of the biggest contributors to stock market losses. The stock market can be counted on to always go up over very long periods of time; it always has. But as the time frame is decreased, the ups and downs of the stock market increase the risks involved by a large amount. Stocks are designed to be long term investments, but some are more risky in the short term than others. This is where a person’s individual situation is very important to the choices made. For example, if the goal is to have an income in the retirement years, a person who is 25 will want to try to maximize long term gains. Since in the long run the stock market will increase, the short term ups and downs are going to be mostly irrelevant (unless you are into market timing, which inceases risk). But a person who is going to retire within a year will need a different outlook. For this person, long term growth is irrelevant, but the short term ups and downs will make a big difference in the outcome. This person will need to minimize risks and forget about maximizing returns. Safe investments will be the only logical place for this person to invest money. If investments are perfectly safe, the only losses can come from potential short term increases in inflation above the expected inflation rate.

For long term investments, the investment portfolio needs to be evaluated at many intervals, to look for mistakes. Any mistakes corrected as soon as possible will minimize any long term losses.

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In order to have knowledge about real estate investments you should invest a few dollars into a couple of books about the subject of real estate investing. There are many excellent books on the subject. You might then make a decision as to which area of real estate investing you would want to get involved in.

There are also methods in which you would find techniques that would explain how to find ways of funding your investments. Normally real estate investors invest for leverage, appreciation and possible tax advantages. This is done by putting as little of your funds into a transaction or project as possible. There are times when you would have to add funds from your pocket, but you should take these on a case by case basis.

Your first couple of investments might be all your funds, but successful investors eventually find those that are willing to assist them in their real estate investments.

You should also seek a local real estate investors group or club to obtain the local practices and things you would need to know about the local investment scene. These groups normally charge a annual or semi-annual fee to join.

You might also find a mentor among the membership, someone that is willing to help you get on your feet and prevent rookie mistakes or errors in judgment. This person would also be able to assist with vendors and tradesmen that would do much of the work you would not be able to do on your own.

I hope this has been of some benefit to you, good luck.

"FIGHT ON"

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Education is the key ingredient. Read all you can get your hands on about investing and the stock market. Knowledge is power, so become an educated invest before making your first buy.

You could start here: www.investopedia.com

I recommend a starter book called “The only investment guide you’ll ever need” by Andrew Tobias http://en.wikipedia.org/wiki/The_Only_Investment_Guide_You%27ll_Ever_Need

If you want to become a member, this is another good Organization to learn from: www.betterinvesting.org

Your next task is to figure out 4 things.

The amount of risk you’re willing to take?
No risk, Low risk, Medium risk
You get the picture.

What kind of investor do you want to be?
Saver, Speculator or Specialist

How long to want to invest?
Day trader, Short term, Long term or Life long

What do you want to invest in?
Stocks, Bonds, Coins, Precious metals, Money Market, Real Estate,Etc.

There are different styles of investing so learn them all and then pick the one that suits your risk tolerance and tastes.

I chose to be a Dividend Investor. I do reinvest my dividends and that buys me more stock. Since I’m in it for a life time I do not let the roller coaster ride of the stock market influence my decision to sell. I have set up an excel spread sheet of stocks that I have considered to buy and loaded them on to a portfolio on yahoo finance. When I copy and paste the current prices into spread sheet my excel spread sheet tell me when to buy, hold, or sell. It does this by the criteria that I set up in the formulas I created in my spread sheet. I research all the companies before they go my spread sheet.

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