Today’s investors and traders have an unlimited supply of information to choose from and help them formulate their plans. Sometimes, too many choices can cloud your opinions, forcing you to reconsider and adjust your ideas. The great game’s goalposts are constantly being moved and you must adapt, or get out of the game.

 The KISS strategy is often the best method. Keep It Simple Stupid. Let’s be honest. Unless you may have some, shall we say, confirmed knowledge of the future price of a security, there is always a risk associated with an investment. Whether you rely on the advice of an Agent or make your own decisions, beware of the misconception in the current Capital Markets.                                                                                                                                                                                .

We are currently entering an exciting phase of the Junior Markets. My intention is not to recommend where to trade, rather to help you consider where not to trade. In my 30 years of trading the Capital Markets I have never witnessed such blatant manipulation, with the Lion’s share being performed in what are considered North America’s Major Exchanges. The adoption of Index programs, high frequency trading, price fixing through options, to name a few, has left only those “in the know” the ability to determine where the price of a stock will end a trading session.

 

Far too often, those same powers can determine precisely the price per share due to the necessity of establishing a closing price via the “maximum pain” basis of option expiries. There are “Dark Pools” which may trade millions of shares of a security you hold, yet not visible to you, only those who contribute to these manipulative forces. There are huge funds, Banks, and Governments always ready to step in and help along certain share prices to where it may be best suitable to their needs. For most of us, we cannot compete with these behemoth Organizations. In trader terms, it’s called “fighting the tape”, and you can rarely win. It’s a mugs game which often leaves you shaking your head wondering how in the world a stock performed the way it did.

 

For as long as I can remember, the term “penny stocks” has always represented securities that require great fortitude and risk. In fact, Brokerage firms margin requirements stipulate excess Capital be available for such investments. I think it’s time to understand that the investment risk in Junior issues is far less than once feared. Today, investors and traders can monitor all stocks in a very timely, dynamic manner to help them determine their goals. The Junior Markets are not immune to the previously mentioned schemes devised by the “Big boys”, but they are rarely used. The time has arrived that there is now greater safety in Juniors and their transparency.

 

I am in no way recommending any particular securities, or where you should place your money. My belief that it is a great time to invest in Junior Markets is simply my feeling that we are in the early stages of growth for many Junior issues, particularly in the precious metals sector, though other areas show huge potential as well. Many Junior issues now retain private Market Making services, adding value to the structure of their shareholdings.

It is safe to say that well run Junior listings now act in a more responsible manner toward their shareholders. There is little doubt in my mind that the CSE and TSXV are primed for increased activity and both Exchanges are extremely well operated. There is risk with every investment you make. If you are prepared to take that risk, you may want to consider the reduced risk of Junior issues, and kiss the big guys good-bye.                                                           

 

Graham Murray is a Capital Markets Consultant offering Market Making and Relationship Management services to Canadian Junior listed Companies at “GMUR Consulting” in Vancouver.                                                                                                            www.gmurconsulting.com