Can Penny Stocks Make You Rich

Entering the world of stock trading can be intimidating and downright dangerous. But the good news is that there are some very cheap ways to get started. That means less risk. One such method is penny stocks.

As the name suggests, penny stocks are very cheap and can actually be bought at pennies per share. Stocks are bought very cheaply, so growth means relatively high returns. On the downside, however, these stocks can fall quickly, resulting in capital losses. However, when it comes to penny stocks, there are very few minimum standards. When a company cannot maintain a position on a major exchange, it often moves to smaller exchanges. This makes this type of stock more risky.

Most of the companies listed on these smaller exchanges are newly established or on the brink of bankruptcy. Poor or non-existent history and performance make it difficult to select the right stocks.
These stocks are illiquid, making it difficult to find buyers. This makes it easier for some traders to "pump and dump" a stock by buying a large amount after attracting other investors, pumping it, and selling it. This manipulates stock prices and someone always loses. buying penny stocks is definitely risky