Penny stocks are very Risky

Most of the people prefer a small investment , but penny stocks have more risk, even if you are investing 5$-10$ beware of the risk , even it may be very small investment just know about it thoroughly and then step forward to invest.

 

Aren't these mostly small and unknown comopanies anyway? I am just starting to learn about stock trading so I want to make sure I have the correct information.

 

Generally, yes. It's just important to keep in mind that $100,000 worth of a $200 stock will be much less volatile than $100,000 worth of a $5 stock due to the fact that any change in the value of a penny stock results in a greater percent change in value.

 

The thing with penny stocks are that they are indeed very risky, but even if you lose everything you won't be losing much.

It's like cheap lottery tickets, you probably have a lower chance of winning, and you can't win as much: but if you lose, you won't lose as much as if you bought that expensive lottery ticket and lost.

 

That is a true but depressing way to look at it Lasonax. I can't believe how many people get burnt on these things.

 

I was always told to avoid them. If a stock cost less than $20 a share, there's a reason why. Ideally your stock should run about $50 bucks a share. Buy them in blocks of 100 and make sure to get a varied lot of stocks.

 

Well you may think of them as risky, I prefer to think of them as companies with lots of room to grow and stocks with lots of valuing potential.

 

I'm not much into stocks at this point (okay, not at all) ... but I *did* sell some last year that was under $5 in the beginning and ended up over $300. Hopefully I'll soon stick my toe in the water and buy some stock.... but I don't think I'll be sticking to only those over $50. Some of the biggies are even lower than that right now.

 

I would never invest in penny stocks. I just couldn't handle the stress. I'm more into the stable stocks.