• Welcome to Sensible Investors, if you wish to comment on any threads and join the Sensible Investors community Click here.

Should I buy penny stocks?

JoeCool

New member
Oct 27, 2021
11
3
182
I was recently looking for more information about penny stocks to learn before I go in. I found an article saying it may not be a good idea?


What do you guys think? If you could help me with some tools to learn a little more I would truly appreciate it.
 
  • Like
Reactions: Smart Finance

Ardgour

Rookie Investor
Mar 16, 2021
102
111
787
North East Scotland
The problem with penny stocks is hype and relying on one asset coming true (such an oil find, the next cancer drug or tech start up)
Many folk pile in thinking they are going to make big gains and don’t- believe me, I’ve been there done that!!

There’s a long list of failures!!

Only put in what you afford to lose.

It’s been a while since I invested in a penny stock and I certainly don’t read any of the forums (which can be quite scary places as it’s easy to get sucked in)

Be careful.
 
  • Like
Reactions: Smart Finance

Smart Finance

Administrator
Staff member
Moderator
Feb 23, 2021
868
507
5,457
gumroad.com
I was recently looking for more information about penny stocks to learn before I go in. I found an article saying it may not be a good idea?


What do you guys think? If you could help me with some tools to learn a little more I would truly appreciate it.
What are you looking for with these penny stocks? A quick buck? The next Amazon/Microsoft?

Think a lot of Penny stocks run on news, hype and volume.
A quote what I think suits penny stocks is "buy the rumour, sell the news".

Penny stocks are extremely risky. You can also suffer liquidity issues as normally these types of companies are young and small. Great if you get in, even better its had good news and your making money. Next thing to think about is is there volume, can you sell it?

Another thing to look at is these shares are typically on OTC markets which can take hours or days to sell if they cannot find the right buyer. The spread on these stocks can vary.