Pros and cons of Penny stocks

Advantages of Penny Stocks

 

1.    One advantage is the tendency to make significant gains by strategically investing a small amount of money.

 

2.    Penny stocks though extremely volatile can turnover rapid growth in a short period making them a great option amongst different aggressive investors.

 

3.    Penny stocks investment gives individuals the ability to access thousands of penny stock shares at a small expense.

 

Disadvantages of Penny Stocks

1.    The lack of liquidity hinders the ease of cashing out as penny stocks are frequently traded in low volumes.

 

2. The “pump and dump” tactics that companies use to falsely represent their companies position by artificially increasing share prices often misdirects investors into losing their investment capital.