Pros and Cons of Investing in Penny Stocks

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Penny stocks are the ones that are typically priced less than $1. Penny stocks have a low price per share, which enables investors to start investing with a small amount of money. Penny stocks are suitable for investors who manage investments through research and continuous monitoring. One of the biggest disadvantages of penny stocks is that they are extremely unstable. Penny stocks are available in almost all the sectors to invest in such as lithium penny stocks, gold penny stocks, etc. Listed here are some of the best performing penny stocks in the ASX market. Check out some pros and cons of investing in penny stocks.

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Pros and Cons of Investing:

Pros and Cons of Investing In Penny Stocks

Table of Content::

Table of Content:

What Are Penny Stocks?:

What Are Penny Stocks? Penny stocks are equities that trade below $5 a share. Penny stocks are basically stocks that trade at a very low price per share. They are typically stocks of small companies with minimum investment. They have a smaller number of shareholders, but they do have their advantages and disadvantages.

Why People Invest in Penny Stocks?:

Why People Invest in Penny Stocks? The desire to make a quick money in the stock market attracts many beginners to invest in penny stocks. Unfortunately, this also means many people lose their money in the blink of an eye. In penny Stocks, “the higher the risk, the higher the potential returns.” If invested in the right companies, penny stocks can provide enormous returns. So if you’re comfortable with the risk versus return trade-off, penny stocks could play a role in your portfolio.

Pros of Penny Stocks:

Pros of Penny Stocks Penny stocks can prove to be more profitable than blue-chip stocks Pay less, gain more Limited loss Quick money Low entry price Higher return on investment

Cons of Penny Stocks If you are comfortable with taking on risk, there are benefits of penny stocks.:

Cons of Penny Stocks If you are comfortable with taking on risk, there are benefits of penny stocks. Low-Quality Companies Most Investors Lose Money Heavy Risky Markets Shocking Valuations Volatility

Recommended Penny Stock for Investment:

Recommended Penny Stock for Investment After the research, 6 penny stocks are listed that we think are the best to buy on the ASX in 2019 that have good growth potential Cann Group (ASX: CAN) Electro Optic Systems (ASX: EOS)  Volpara Health Technologies (ASX: VHT) People Infrastructure Ltd (ASX: PPE) Webjet Limited (ASX: WEB) Australian Ethical Investment Ltd (ASX: AEF)

There are numerous successful penny stock traders who with their hard work, dedication and a knowledge of the markets earned good profits. Simply weigh the options on both sides of the table and then let you make the decision. Therefore, it is concluded to decide after knowing every detail of all pros and cons of penny stocks. So, these types of investments are not for everyone. Doing proper research with valid information is very important.:

There are numerous successful penny stock traders who with their hard work, dedication and a knowledge of the markets earned good profits. Simply weigh the options on both sides of the table and then let you make the decision. Therefore, it is concluded to decide after knowing every detail of all pros and cons of penny stocks. So, these types of investments are not for everyone. Doing proper research with valid information is very important. Conclusion to Buying Penny Stocks

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