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Stock promotions enable investors to become shareholders of an upcoming company. However, the investor awareness industry has been given a bad name by bad seeds. They make investors get caught in by other investors dumping their investments
Investor awareness firms
a) The firms may not be straight forward or the information they give may be biased. The reason is that the firms are paid fees to generate the newsletters, campaigns, and articles. The firm is paid in cash, or they may opt to take up an option thus becoming shareholders of the company. With the investor firm becoming a shareholder the information it gives will be biased.
b) Employees of the company or people who know how the company will perform do insider trading. Therefore, during campaigns, as an investor you should be aware of employees selling their options.
c) Pump and Dump is a method used by companies to introduce a bullish market for their shares. They offer their shares to employees to cheat the market. To avoid this situation, then you have to make sure that there is a restriction on the shares of the company.
d) You will need to ask yourself a number of questions. This questions are based on your intelligence and observation skills. Is the company profit making? Is the company in business? Does the company have an investment for the future? These questions are important because they make you to know what to look for in a company.
However, do not always accuse firms of pump and dump scenarios, or the investor firms of being biased just because they have taken up shares. They might do so because of:
1. The campaign may be successful such that the shares become valuable. Therefore, the firm will need to make more money from this opportunity.
2. It might be the only option of the investor awareness firm to close the deal.
When a stock is being promoted, it is an opportunity to get money, as more investors are attracted to customers. However, to determine the sheep from the wolf in this case will only take your personal intuitiveness.
Much as there are so many people who are trying to create an awareness of the stock market and the events thereof, it is important for you as an investor to make sure that you are as informed about the market as possible. The main reason for this lies in the fact that you will be in a good position to make worthy decisions once you are well informed about the market. Investment is about money and most importantly your money.
Therefore you have to make sure that you guard your money with as much intelligence and verve as you can. This you can do by being knowledgeable.