Penny stocks are heavy on risk, but can sometimes be even more heavily laden with rewards! Unfortunately, the realm of penny stocks is made much worse by all the MANY scams and fraudsters that are so common when considering penny stocks for your portfolio. A couple of the many scams to be aware of, and educate yourself on, if you are considering penny stocks as an investment: Fraudulent promotion: scammers write newsletters, send emails, cite "research reports" (that they usually write themselves or pay someone else to write), and post on investment forums and other forums where people are likely to have money to invest or spend. I often wonder: how many of the posts on the investment forums I visit - like this one - are posted by "promoters" interested in profiting on the money others lose in their schemes? Pump and Dump: Most penny stocks are very thinly traded, and often OTC instead of one of the major exchanges. "Pumpster/Dumpsters" buy a lot of cheap stock, usually for just a few cents, in a company that has has some aspects they can promote, then use the 'fraudulent promotion' methods (above) to raise the stock price, then sell it when the price bumps higher. When you can buy thousands, or tens of thousand of shares for less than a dollar each, and a price rise of just 25 cents/share is at LEAST a 25% return, it's easy to see why this is tempting to people who are unethical! If they purchase the stock at just 25 cents/share, they've DOUBLED their money! There are lots of other ways to scam penny stocks. Stocks that have some connection to sectors like AI, EVs, mining (especially gold, silver, copper, oil, etc. but others as well) and other "hot" sectors are easier for them to "pump up". Here's a link to more details on the pros and cons of penny stocks: https://www.investopedia.com/updates/penny-stocks-risks-rewards/ I have no association with investopedia.com, except as a user. They have lots of good information on many aspects of investing. What are YOUR thoughts on penny stocks?
When it was HotStockMarket 2008 to 2016 or something everyone followed my finance thread lots of great opportunities and some dumps. Alot can be made at penny's. Favorite AI gov stock a buck will go up to $2 in time NOTE.
