Robert C. Henderson, President, Lansdowne Wealth Management
For people interested in trading penny stocks, I would recommend not using your "serious" money. As Laurel said, it's really akin to gambling. So take a small percentage of your investment assets that you are OK with losing, and treat it like "fun money". You will win some, lose some, and maybe you win a big one. But don't get too wrapped up in it, and definitely don't allocate much of your assets to this strategy.
Laurel Hardy, Founder, Bespoken Wealth
Penny stocks are considered risky because they move quickly and become worthless so often. The price of those stocks is low because there aren't many people willing to invest in them (supply and demand).Sometimes we have to learn the hard way not to touch the flames. If you're new to investing and haven't learned the hard way yet, there might not be much that I can say to encourage you to avoid penny stock investing.
Day trading is not long term investing no matter what you buy. Day trading is more like gambling. Only gamble on penny stocks if you can afford to lose all the money you invest.I realize it might not be what you want to hear, but you might want to consider just saving your extra money until you can afford higher quality. If you have a 401(K) at work, then contribute more to that. If you get matching contributions, then that's free money to you. Matching contributions are really the only free money out there, boring but true. Penny stocks are definitely not free money.... There's so much risk involved that it's unlikely you'll ever be compensated for taking it on. No risk no reward, but too much risk and no reward is worse than no risk at all.
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