How do you explain to someone that penny stocks are a bad investment?
A few reasons that “penny stocks” should generally be avoided are as follows:The companies behind these stocks often go bust (do some research on that)Penny stocks aren’t traded much which means that it might be difficult to get your money back or get a good price when you want to sellTheir financial statements are often of suspect qualityTheir stock prices are more volatile -they can go up and down like rocketsThey exist in small volumes and for that reason are very subject to manipulation-e.g., “front running”
What is the deal with investing in penny stocks?
Penny stocks are very dangerous investments.Penny stocks are the cheap stocks you can buy for less than $5. Tempting to invest in especially if you have limited capital right? But they are the double edged sword of investing.Most of these companies are selling very low because of bankruptcy, or just because of failed management. No one can predict if these companies can potentially bounce back to a better price. That is the reason why most investors would warn you against investing in penny stocks.
Why do investors hate so much on penny stocks?
Most of those down on investing in penny stocks are that way either because they believe media hype, have lost a lot of money on pennies or lack tools for them to evaluate the GOOD from the BAD/UGLY. You are still relatively new at it but hopefully you are learning FA and TA skills to make your life more predictable/easier. As long as you diversify your holdings and don't pick random losers and get out before things turn ugly, accepting the occasional small loss and having to tools to milk the long run. You should do fine. Don't brag about it...this sounds a bit like brag...If you have not experienced bad times yet....plan for it. There is nothing like a 2008/2009 situation where everything you touch goes bad, to teach you a life lesson. If you prepare for such an event then it dulls the pain. Above all, analyze each failure to figure out why it went bad...Frankly you learn more from failure than you do from success if you do it right. Good luck "Why discourage it for the young who have low amounts to start with and can take risks?" Because 90% of those young people do not understand how to invest their money....they have little or no method and trade scared...getting in and out strictly on Buzz...a recipe for disaster. If you dedicate yourself to this as a business and upgrade your skills...you can do well.
How to find best penny stock to buy?
my friend, please don't ever buy a penny stock. in the stock market, you get what you pay for. stocks that are very cheap are companies that normally are in bad financial shape. what good is it to buy lots of shares of something that isn't any good. you would be much better off to buy as many shares of good companies than buying lots of shares of poor companies. and when those penny stocks go out of business your stock becomes worthless and your money is gone. it is hard enough to make money in the stock market when you own good stocks, forget the cheap ones, they are for suckers. start buying the newpaper investors business daily and they help you find the good companies to invest in, and watch cnbc on tv all of the time, good luck to you
Penny Stocks?
Do Penny Stocks actually make a lot of money? Is it reliable to invest in Penny stocks? Is there any penny stocks that are worth investing in? Or are there any examples?
Why do people say investing in penny stocks is a bad idea when I made 80%+ gains?
Around the end of 2016, after the recovery from a short bear market, I purchased a company’s stock (Which I will not name, but I can tell you that it is a Tech company) at Rs. 39 and little more of it at around Rs. 60. I had done adequate research and believed that it was worth at least Rs. 100 and would continue to grow sufficiently.Just a month after my purchasing of this stock, a well-known investor entered the stock, maybe at around Rs. 80 levels if I recall correctly. Over the period of the next few months, the stock kept hitting new all-time highs and even went as far Rs. 250-ish. I remember this distinctly because, in that time period, the stock kept hitting upside circuit breakers and had to stop trading during market hours for many days, which I thought was pretty cool to witness.Just a few days after that all-time high, there came an announcement saying that the same investor had sold off all his stake in the company. In 2017 so far, the stock has slid many more trading sessions than it has gained and is currently back to trading around Rs. 75 levels, about the same price at which it was before the investor landed. I still intend to hold the stock for a long, long time, unless my narrative of the company’s valuation changes drastically. If I had sold the stock at Rs. 250, I would have made a killer profit. But any profit beyond what I would have gotten by selling it at Rs. 100 could not be attributed to me, because I didn’t anticipate it. And I couldn’t be bothered to make small short term gains, when I know I will make a consistent long term gain.What I’m trying to get at is, if a fairly well-traded (Volumes in lakhs) share can be manipulated by a single investor like this, imagine how a low-volume Penny Stock could be. Penny Stocks are bad because the liquidity offered by them is superficial. A single deep-pocketed investor can bend its price to his whims and fancies. Or a single bad news about the company could shut down all trading activity, trapping all current investors with massive losses. Your 80%+ gain is pure chance. If you can replicate it with other Penny Stocks, maybe you could create history. But I doubt you will. Show me one Penny Stock from 10, 20 or 30 years back which has given at least a 10% CAGR and I will concede.Benjamin Graham puts it nicely: “In the short term, the market is a voting machine. In the long term, the market is a weighing machine.”
Penny stock investing...is this a good idea?
Short Answer: No way, you'll lose your shirt. It's a completely horrible idea. The VAST majority of these penny stocks will never go anywhere. They'll move up and down huge percentages, but in the end most will fail. Don't forget your businesses classes, most business fail. If penny stocks were really a gold mine, all the big investors will be in them. Also, the volumes are so low, you'll always have a hard time getting a fair price on either the buy or sale side. Think you can trade the ups and downs quickly enough? Doubt it. There are people whose computers autotrade far faster than you can ever respond. Also, look at the best stock investors and money managers. They won't touch penny stocks with a ten foot pole. If you are still interested in stock picking, you'll learn far more and do better in the long run with trading regular stocks. If you are interested in cheap stocks, now is the perfect time. Stocks like Ford, GM, Citigroup, Sun Microsystems, and many others trade well below $10. But lets look at your example GRYE. Average daily volume is about 25K. If you put in a buy order of 100,000 shares, it'll drive the price sky high to fill the order. Then you'll be holding 100K shares and you'd need someone to come in and buy even more shares to even budge the price. If you really feel like this is the way to go, buy $500 bucks worth. It'll be a much cheaper less then buying 5K worth. If you don't believe me, I'll see if I can buy some shares tomorrow and push the stock up, forcing you to buy at a higher price, then once you buy, I'll sell them. Then you'd have to find someone to come in at an even higher price then you purchased them at.
What s the best app to buy penny stocks?
I m looking for any app that is good for investment. Something that is low risk. I want to learn how to start investing so I want to start investing in small things for low amount of money.