Why Penny Stocks Are Dangerous

Published on April 29, 2021

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In this video, I discuss the dangers of penny stocks. A penny stock is any stock that trades below $5/share. I would go even further and avoid most stocks that are priced under $20/share, especially if you are just getting started in trading or investing.

Penny stocks are usually associated with bad businesses, shady operators, and pump and dump schemes. For this reason, they should be avoided by most investors and traders.

Penny stocks are volatile, and can turn unexpectedly illiquid at any time, thus stranding an investor in a stock that he cannot exit without taking a huge loss.

Penny stocks also do not trend as well as higher priced stocks. Penny stocks tend to be mean-reverting, and most of them eventually approach zero or are delisted.

Most investors and traders are better off buying fractional shares of a higher priced stock, rather than dabbling in penny stocks.

Not investment advice! Consult a financial advisor.

GNUS income statement:
https://finance.yahoo.com/quote/GNUS/financials?p=GNUS

GNUS cash flow statement:
https://finance.yahoo.com/quote/GNUS/cash-flow?p=GNUS

GNUS management team:
https://ir.gnusbrands.com/management-team

GNUS 10-K:
https://ir.gnusbrands.com/all-sec-filings/content/0001683168-20-001032/0001683168-20-001032.pdf

GNUS insider transactions:
https://finance.yahoo.com/quote/GNUS/insider-transactions?p=GNUS

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Why Penny Stocks Are Dangerous

Why Penny Stocks Are Dangerous, Why Penny Stocks Are Dangerous.

Cent Stock Psychology

The trick to making profits while trading in cent stocks is to begin fresh every day on each trade. And 3rd, with little amounts of cash (say Rs.15,000) you can buy more shares of X (1000) than A (only 20).

Why Penny Stocks Are Dangerous, Enjoy trending full length videos related to Why Penny Stocks Are Dangerous.

Buying Cent Stocks Online

The brokerage homes have to opportunity of making great trading commissions. Research is the key to success in this type of stock trading much like any other kind. They may reverse split your stock into oblivion.

ABOT Mining Corp., ticket PINK: ABOT, is another of the top penny stocks to hold and purchase. ABOT Mining is a business that finds, gets, develops, produces, and markets residential or commercial properties that provide valuable and semi rare-earth elements. Current news concerning a collaboration with Mexican mining company Rising Star S.A. de C.V has caused this stock price to increase. Another possible cent stock to get and keep is Alternative Energy Partners Inc., symbol PINK: AEGY. This financial investment choice offers a portfolio of stock in a few of the leading energy solution business of all sizes, yet trades for less than a cent a share. If the expectations for this company are met the future price of the stock could be much greater.

How do we catch these big price motions? What sort of research is required to know when to enter into a trade before a huge spike in the stocks’ cost? Some traders have actually spent years studying and practicing in order to get this right. There is a science and an art to picking the Best Penny Stocks.

Throughout the years of trading, I experienced lots of individuals who had actually succeeded over a short quantity of time trading Penny Stocks. I was on the edge of trying it so numerous times I can’t count them all however I always withstood the temptation until I ACTUALLY needed the cash.

Then, you ought to compute the Price/Earnings/Growth (PEG) ratio. Simply divide the PE ratio with the forecasted growth rate in the next 3-5 years. You can then trim the choice to the stocks with the most affordable PEG ideally those with less than 1.0 ratio.

Now if those two things trouble you, and if you only like trading stocks that trade on the big boards such as the New York Stock Exchange you need to avoid Remarkable Penny Stocks Trading Stocks and all other penny stock promoters.

These stocks are normally viewed as released by business that have actually just gotten in the marketplace and have only a small scale operation. The primary reasons that there are a great deal of people acquiring these stocks is due to the fact that of the inexpensive rate, that’s why it is truly cost effective compared to purchasing the shares of the more established companies. Plus having this sort of stock can make you a proud part owner of the firm for a really affordable rate. These little firms that offer the penny stocks can likewise have the potential to experience great development in the future. As a result the stock rates can differ substantially in the short term. There is no doubt that to own these kinds of stocks can be a truly satisfying and exciting choice.

Buying penny stock can be injurious to your financial health. So it might be best to avoid them. However, if you are still a game for it, tread (and trade) with extreme care. Please do take great care of your money.

They are not exchanged through the NASDAQ and the New York Stock Exchange which are big stock exchange gamers. Micro cap stocks have less readily available details than stocks that trade on the major exchanges.

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