Well Happy Valentines Day to all of you penny stock investors out there. Hopefully this is another day where you’re able to spend time with your loved ones and share with them your time and kind words. So after you’ve done that I’ve just a got a quick little message about investing in penny stocks, and advice that applies to all investing as well.

It seems that when you hear about general investing advice a lot of it has to be amplified when you’re dealing with penny stocks. This is very true for many reasons, but mostly it’s because of the additional risk that you’re taking on. Investing in penny stocks is a high-risk endeavour, but chances are if you’re hear reading this you already know this and have accepted that fact. With that extra risk you’re hoping to profit big time and that’s cool. But there’s something that you should keep in mind once you find that gem of a stock that’s up 400% in your portfolio. Don’t fall in love.

Falling in love with a stock is one of the worst things you can do with an investment because it won’t love you back. It can’t, it’s just a piece of paper at best, and a few pixels on a screen at worst. But seeing that balance on your investment account grow day after day as your company is crushing it can distract you from the task at hand which is finding solid investments.

One of the Top 10 Rules for Investing in Penny Stocks is to have an exit plan and you need to have one for your winners as well as your losers. I sincerely hope you’re not in love with your losers, but you might love your winners and that’s just as bad. Your winners can turn into losers overnight. Again, this is more true with penny stocks than any other class of investments. Since a lot of these are upstart companies they can have wildly good news for a couple of months before lack of financing or lack of approvals kill the dream and the company goes down the tubes and is ultimately worthless. If you’re in love with that stock you’ll keep giving it a second, third and fourth chance, all the while your account balance is on the slippery slope down and your exit strategy along with it.

So on this Valentines Day fall in love with a person, not a stock.

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#image credit: Niffty..

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