Top 4 Reasons Why 99% of Investors lose Money in Penny Stocks !
Channel: The Nomad Economist
Date: 2020-07-09

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Top 4 Reasons Why 99% of Investors lose Money in Penny Stocks !
Firstly let's understand the meaning of penny stock. What is a penny stock?
Penny stocks are the stocks whose company’s market capitalization is very small, with little to no profits and minimal operations.
The term penny stock is generally used interchangeably with micro-cap. Technically, micro-cap stocks are classified as such based on their market capitalization, while penny stocks are looked at in terms of their price.
The main thing you have to know about a penny and micro stocks is that they are much riskier than regular stocks. Taking a penny stock is one of the riskier decisions that first-time investors often make.
Four major factors make these securities riskier than blue-chip stocks.
#1.Lack of Information.
#2.No Minimum Standards.
#3. Lack of History.
#4.Liquidity.
Make sure you look over any information the company offers, including its financials. Are these quality statements? If the company reports its statements on time and shows that the company is financially stable, it may point to a sound investment. Be sure to do some research on the company as well.
Penny stocks aren't a lost cause, but they are very high-risk investments that aren't suitable for all investors. However, if you can't resist the small caps, make sure you do extensive research and understand what you are getting into.
So here I have presented the brief of a penny stock through that you can see why most of the investors lose their money by investing in penny stocks. It requires deep knowledge and experience.


For the full transcript go to https://financearmageddon.blogspot.com

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