Stock market investing is a very popular way to earn a second income stream on a part-time basis. As with all business opportunities, managing risk is incredibly important for stock investing. Basically, this means that you do everything you can to minimize the chance that you end up losing money instead of earning it.



A popular way to do this with investing is to trade penny stocks, over-the-counter (otc bb) stocks and pink sheet issues. These are typically low-cost, ranging from literally pennies per share up to a few dollars per share. A new investor can invest just a few lunches worth of money to start placing trades and begin the learning process.

With penny stocks, there can be a huge upside, which is the main reason they are so popular with part-time investors. It is a common occurrence to see a hot penny stock increase 100% in a short period of time - which may be a month, or a week or a day.

The trick, obviously, is to learn how to identify these stocks before they make the big gain. Part of learning how to pick hot penny stocks is to apply technical analysis or fundamental analysis to identify positive trends. But this takes time and expertise and you can lose money during the learning process.

There is another way to identify big gainers before they take off. This method doesnt require years of stock market expertise, which makes it very beneficial for the beginning investor. What you need to do is find companies that are conducting a stock promotion on their stock.

A stock promotion is simply a marketing campaign where the product is the penny stock itself. Usually a third-party conducts traditional marketing activities, which might include issuing press releases, doing email and fax blasts, maybe even direct mail. All these are intended to communicate the investment potential of the company to investors. This increases demand for the stock, which increases the price.

Seven out of 10 stocks that increase 100% or more in a short period are driven by stock promotions. Spending money promoting your own stock is a smart thing for a company to do, because as the stock price increases, so does the market capitalization of the company and its chances to secure additional credit. It also makes money for its shareholders which, in turn, makes management look good.

The good news for the people working to make money part-time is that information about which penny stocks and small cap stocks are planning promotions is available. But before the stock promotion actually hits the streets, that information is not widely known. Getting this information in time to profit from it is available only through newsletters or subscription services that have access to this information beforehand.

These sources are not usually very expensive. After all, the whole idea of conducting a stock promotion is to get more investors interested in buying the stock, right? So it makes sense to get this information out to investors without charging too much for it.