Smallcap-Investors.com - F.A.Q.

What is the goal of smallcap-investors.com? The goal of smallcap-investors.com is to help people who buy micro-cap stocks by finding the information they need. It is important for investors to realize that the world of micro-cap stocks is full of hype, though there are many great micro-cap companies. We try our best to find these companies. smallcap-investors.com is run by experienced investors and freelance professionals. We try to be completely unbiased.

Do I need any special skills or experience to get started trading stocks? The short and simple answer is, No. However, do seriously study the stock market whenever you get a chance. A good dose of common sense and some honest effort will go a long way toward becoming a successful trader or investor. The more time you put into studying the market, the more successful you'll be. You will find that trading and investing in low-priced common stocks is a very interesting and enjoyable endeavor. Our experience has been that the more you know, the more you want to know. This is one of the few things left in life where an ordinary person can financially make up for long lost time. The emergence of the Internet and World Wide Web has made it possible for everyone to have access to information that was not readily available in the past. This has leveled the playing field dramatically. You can now have access to all the strategic information that you need to make winning trades.

How much money does it take to get started? You can get started buying, selling, and trading small stocks with just about any amount of money. The first thing you do is open up a trading account at one of the deep-discount brokers. Some require no initial deposit at all. Others require $500 to $1000, and others want $2000 to $5000 or more. You can buy 1000 shares of a 50 cents stock for just $500.00, plus a couple of bucks for the brokerage fee. The cost of the stock and the total number of shares are what determine your startup cost. Buying smaller stocks allows you to control more shares that will offer you much greater profit potential.

Can I make a million bucks before lunch, or something similar? No! You won't find any get-rich-quick hype here! Having said that, let us also say that you really can make yourself some very impressive gains within a relatively short period. There's really no limit on how much money you can make on a stock. Some people make 2 to 3 trades a year and make $10,000 - $15,000 in profits. Others might have a 20,000 share block and ride it up $3.00 to $4.00 a share, in no time at all.

What exactly are micro-cap stocks?
Many analysts consider a stock with a market capitalization (the number of shares of stock outstanding multiplied by the price of the stock) of less than $500 million to be a small-cap stock and a stock with a market capitalization of less than $100 million to be a micro-cap stock. These numbers change for mutual funds, however, because of their enormous buying power. A small- and micro-cap stock fund would probably consider any stock with a market capitalization of under $1 billion to be a small- and micro-cap stock.

I have never invested in a micro-cap stock before. Where do I start? First, you have to set up an account with a brokerage firm. There are numerous discount brokers to choose from. You can use the search engines on the Internet and type in "discount brokers". Select one that fits your investment style. If you decide to buy into one of our picks, you may want to use a discount broker that trades OTC Bulletin Board stocks, since we do select these now and then. Another very good source is "Internet Investing". They are located at: http://www.internetinvesting.com. This is a comprehensive guide to discount brokers, online brokers and after hours trading.

What does NASDAQ stand for? NASDAQ stands for National Association of Securities Dealers Automated Quotation. To know more on NASDAQ, please go to http://www.nasdaq.com.

What is The OTC Bulletin Board? The OTC Bulletin Board is a service run by the NASDAQ Stock Market, Inc., which also runs the NASDAQ Stock Market. Stocks that are quoted on the OTC Bulletin Board are not NASDAQ stocks. The OTC Bulletin Board began operation in 1990 and facilitates trading in thousands of stocks that don't qualify for either of the NASDAQ markets. Unfortunately, unlike NASDAQ, the OTC Bulletin Board is an unregulated market and the potential for scam and fraud is much greater. Companies that list on the OTC Bulletin Board do not have to file any financial statements in the Securities and Exchange Commission's EDGAR database and they do not have to meet any listing requirements other than having someone make a market in the stock. To know more on the OTC Bulletin Board, please go to http://www.otcbb.com.

What is the difference between the NASDAQ National Market, The NASDAQ Small-cap Market, and the OTC Bulletin Board?

The main difference between these markets is the listing requirements. The NASDAQ National Market has tougher listing requirements than the NASDAQ Small-cap Market does. Both of these markets are a part of NASDAQ. The OTC Bulletin Board, on the other hand, is not a part of the NASDAQ. Although some companies claim that they are listed on the NASDAQ Bulletin Board, they are really quoted on the OTC Bulletin Board, which is run by the NASDAQ Stock Market, Inc., not NASDAQ. Unlike the NASDAQ National Market and the NASDAQ Small-cap Market, companies that are quoted on the OTC Bulletin Board do not have to meet any listing requirements, but do have to file financial statements in the SEC.

What is your approach to trading stocks?

Our focus is to capture short-term trading opportunities within a 3 to 30 day time period. This time frame, which is largely overlooked by most market players, offers many opportunities to make above average profits in a short period, while minimizing risk by not having capital tied up in the market waiting out periods of consolidation or weakness.

Do you use stock fundamentals for stock trading? Our stock selections are based primarily on technical analysis that we believe is the only appropriate way to analyze stock picks when going after short-term gains. Most market players have realized that even the prices of the most fundamentally sound companies can go down for several days, and conversely, even companies with poor fundamentals can have periods during which their prices increase. Fundamentals become more important as the investment time frame increases to a period of several months. In the short-term, it's technical that rules.

How often does smallcap-investors.com feature new stocks? We generally reature one to four new stock selections per month.

Are most smallcap-investors.com selections traded on the Nasdaq? No. smallcap-investors.com generally highlights both Nasdaq stocks and OTC BB stocks that appear to exhibit exceptional strength.

Do I have to receive the stock selection through email? No. We also post on our website. The new selection is then announced simultaneously through both the Website and our email notification system at the scheduled announcement time.

Do you give updates on stocks that you cover? Yes. We publish updates after the bell or during weekdays or weekends. In addition, we may release one or two more updates during weekdays for special events. We inform you these pick releases in advance. Our picks will be separately released during the trading session or after the bell. We release our picks and updates via website, as well as e-mail. Some times e-mail delivery may be delayed by mailing listserv. Please check our website as often as possible!

For information or assistance, please email newsletter@smallcap-investors.com

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