Before investing in penny stocks, get the facts. This segment of the market has often been a playground for fraud.
Penny stocks are low-priced stocks that typically start out at less than one dollar per share.
They are sold on the promise of significant potential growth. Very often, companies issuing penny stocks are new to the market. They may not have been in business long enough to establish a proven track record or credible financial history. Another characteristic may be an inexperienced management team. These factors undermine market reception and the ease with which penny stocks can be traded.