Why are penny stocks that trade at a few cents not considered safe?
I have been reading in a few places that these very cheap stocks are not considered safe. I was hoping to invest alot of money in one that is trading at 0.0092.
Is it because they are a low worth company and could just go bankrupt or what is the reason for them to be considered unsafe.
They are considered extremely high risk because they often go to zero. Even if you paid a low amount per share, you can still lose 100% of what you invested.
Bid/ask spreads are huge. For many penny stocks there is plenty available for sale, but no buyers to be found when you want to sell.
You really need many years of highly specialized experience to even consider penny stocks.
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