Know about some tips on Penny Stock Investing for Beginners

Introduction to the plan of Roth IRA

Roth IRA refers to the Retirement plan in the United States of America that is customarily not tithed as long as the people meet with certain demands laid forth in the plan. According to this plan, in certain circumstances, tax curtailment is given on a specific limited amount that is further used for Retirement Savings. The key feature that makes this plan stand out is in the very fact that in this plan you get a break from paying tax not at your initial investment but during your retirement when you start making withdrawals. Here are the basic details about Roth IRA that even the best Roth IRA providers might have missed out on.

Age limit:

  • There is no particular age to become a benefactor of Roth IRA. If you earn, mark my words ‘EARN’, you can contribute in Roth IRA. If you have savings from your parents, that cannot be contributed in the Roth IRA. You can only contribute the minimum that you have earned yourself regardless of what your age is.

Income affecting contribution:

  • Your Roth IRA contribution cannot be more than what you have earned that particular year.
  • Your Roth IRA contribution cannot be more that what the limitations states by even the best Roth IRA providers.
  • If your Modified Adjusted Gross Income is more than what has been set by the Roth IRA providers, you might be shunned from being allowed to contribute in Roth IRA.

Contribution of partners:

  • If your spouse is not of age or non working, he/she can definitely contribute in Roth IRA although he/she can only contribute the minimum that has been saved by them.

Benefaction claim:

  • It is not in the Roth IRA policies to deduct your Roth IRA contribution even for the best Roth IRA providers.


  • The last day for your benefaction of the said year is April 15.

Minimum amount:

  • A minimum of $1000 is required to contribute in Roth IRA.

Tax schemes:

  • Undeviating benefaction to Roth IRA may be extracted tithe and devoid of sanctions at any time. Earnings may be extracted tithe and devoid of sanctions after 5 years provided that the condition of age 60 is met with.

Know about some tips on Penny Stock Investing for Beginners

When it is about penny stock then you should follow some important rules to avoid fraud cases. If you are not taking your decision wisely then you can face a big loss. So, if you are investing in penny stock as beginner then you should follow some basic rules.

  1. Always trade during the normal hour:

Penny Stock Investing for Beginners can easily bring a high amount of money. But you should always trade in the normal hours rather than off timing. Because you can face an absence of flow in the later hours of the market. But you should take advice from an experienced investor before investing in penny stocks.

  1. Never challenge a performance:

Many times it is seen that investors start to challenge a trade. Many people start to buy when a particular stock moving higher. This is not a good practice for every time. You should follow the market trend other than chasing it. If you follow these trends properly then only you can gain properly.

  1. Keep your holdings to 20-30 positions:

It is a golden rule for the investors .If you hold a portfolio of 20-30 positions then you can gain maximum. So, always try to maintain this portfolio.

And if you are not understanding these rules properly then you should take help from an experienced trader.

Stock market is always very risky. So, you should take decisions wisely especially when it is about penny stocks. Penny Stock Investing for Beginners is a vital process by which you can gain a lot with good decision making power of yours or can face a big loss. Penny stock is a very volatile procedure so, you should hold your stocks minimum for 90days.

Know all details about Return on Investment

Return on Investment is a term by which we can understand the benefit level of any investor. When a person invest his money in a particular investment policy that time it is not clear that whether he will face profit or loss, by this ROI you can understand the rate of profit of any particular policy. In this system the return amount of the policy is compared with the capital amount which is invested first.

Life is very much unpredictable so, it is not possible to understand surely whether you are going to face profit or face loss in a particular investment policy. But always you have to read all market related papers when you are deciding to invest your money in a particular investment policy. ROI sometimes can help you to assume your business position whether you are in a right track or not.

Different ways to find profitability of your investment in your business:

There are several methods of Return on Investment which will help you to calculate the profitability standard of your investment. These are as following:

  • Firstly you can measure the pricing policies of your business.
  • Then you should check the investments you have done in the inventory.
  • You can divide the net income, taxes and interests by the full amount of liabilities and thus you can get the earning level of capital amount.
  • You can divide income taxes and net income by fixed liabilities and proprietary equity to generate the earning rate.

These are the very simple calculations by which you can measure the rate of profit of your invested capital. But you may face several risks also when you are using Return on Investment as a tool to measure profit. Like, if the amount of investment is very high then the result of ROI may not be exact so, you should not believe in its result blindly.

Some points to consider for a first time investor

A Roth IRA is a very well-known retirement plan that helps elder people to get a tax free plan after retirement but you have to maintain some minimum conditions to get advantage of this plan. This plan is under of US govt. and it is totally different from other retirement plans available in the market. The fundamental of this particular retirement plan is to give you a tax free money withdrawn facility in the time of retirement where other retirement plans grant you this tax free facility at the time of money placement in the plan.

Which points should you remember in the time of choosing providers?

There are various points you have to keep in your mind when you are choosing your Roth IRA provider. There exist some basic criterias of an IRA account regardless how much you are experienced in such investment processes. If you have already made your mind to invest in Roth IRA then maintain these steps:

  • The provider should provide you flexibility on your account balance. Account balance limit should be reasonable enough.
  • They should provide commission free ETFs and mutual funds with very low cost structure.
  • If you want to inactive your account they should not charge fees.
  • Best Roth IRA providers should provide basic banking facilities like debit cards and check writing facility.

Some points to consider for a first time investor:

If you are opening your retirement account for the first time then you should always consider these following points:

  • The Best Roth IRA providers should give you a very friendly customer service as you are a first timer. They should meet up all your queries clearly about the account.
  • They should provide cheap rated ETFs and index funds in very minimal fees.

How is Roth IRA different from Traditional IRA?

Traditional IRA is an individual retirement account which is not tax exempted unlike Roth IRA. Traditional IRA provides the retirement plan to anyone irrespective of their income or age. However, unlike Roth IRA, Traditional IRA is not a suitable plan for people who would be paying more taxes after retirement as this does not provide withdrawals without taxes but charges a certain amount of tax on the amount.

Investment Limits

Similar to Roth IRA, Traditional IRA has the maximum limit of contributions per year (for 2015) set at $5,500 and $6,500 for senior citizens aged above 59 years. Roth IRA has set certain limits for different income groups. But Traditional IRA allows anyone to contribute money in their scheme, i.e. has no income bars. This allows people from all income groups to contribute in Traditional IRA. From this perspective, the return on investment for both Traditional as well as Roth IRA is comparable.

Withdraw money without paying tax:

Contributors can withdraw money anytime in Roth IRA without paying any tax but they have to pay taxes for withdrawal of pre-tax contributions or any earnings when distributed in Traditional IRA. Also, withdrawal of money before the age of 59 and a half will be subjected to a 10% early withdrawal penalty only if there is no exception involved in that particular case. A non-qualified distribution in Roth IRAs is subjected to taxation of the income of the individual and a 10% additional tax will also be charged in normal cases.

In the case of Traditional IRA, the respective contributions lower the gross annual income of the individual officially allowing the person to invest in other schemes and retirement plans as well which he will not get normally. Roth IRA does not lower the gross income but allows certain relaxations for people with lower gross income.