Should You Buy Penny Stocks? Why You Should Resist the Temptation!

penny stock

Many investors are drawn to buy penny stocks because they believe they can obtain a sizable gain on their investment. Therefore, the term, penny stock, is often synonymous with a micro-cap stock. Micro-cap stocks have a market capitalization which is the total market value of a company’s shares that are outstanding of $50 million to $300 million. Companies with market capitalizations of $50 million or less are hazardous and are classified as nano caps. Cap is short for capitalization. Some investors are drawn to the idea of quick, sizable profits when they invest in penny stocks. After all, it is pretty tempting to think that you can buy 50,000 shares with only a $500 investment. But, regardless of how small … Read more