A Beginner’s Guide to Penny Stocks: Risks, Rewards, and Essential Tips
A Beginner’s Guide to Penny Stocks: Risks, Rewards, and Essential Tips When it comes to the world of investing, one of the more alluring options for those seeking high returns with minimal upfront capital is penny stocks. Often costing less than $5 per share, these stocks allow investors to own a significant number of shares for a relatively low investment. But before diving into the penny stock market, it’s important to understand what you’re getting into. In this guide, we’ll explore what penny stocks are, why they’re attractive to investors, and what you need to know to navigate this high-risk, high-reward space. What Are Penny Stocks? Penny stocks generally refer to shares of small public companies that trade at a low price per share, often under $5. These stocks are typically traded over-the-counter (OTC) rather than on major exchanges, though some do trade on the NASDAQ or NYSE. The companies behind penny stocks are usually smaller, less-established businesses, which can mean hig...