Finding the Best Cheap Stocks to Buy Now – Penny Stocks
Penny stock often look like the best cheap stocks to buy now. Hey, you sure can load up on a lot of shares when they go for 10 cents a pop. And it’s a heck of a lot easier for a 10-cent stock to double to 20 cents than it is for a $100 stock to double to $200.
Too bad you should run from most penny stocks like the plague, even though they definitely look like great cheap stocks to buy. Penny stocks trade over-the-counter — not on a major exchange. They are not subject to stringent listing requirements. Even worse, they’re not subject to the same kind of regulatory scrutiny by the Securities Exchange Commission. As the SEC warns:
“Penny stocks are generally considered speculative investments. Consequently, investors in penny stocks should be prepared for the possibility that they may lose their whole investment (or an amount in excess of their investment if they purchased penny stocks on margin).”
Some penny stocks eventually graduate from the OTC market to Nasdaq or NYSE. Indeed, InvestorPlace recently looked at a number of medical marijuana stocks like Medical Marijuana Inc. (MJNA) and Growlife (PHOT) that are penny stocks with some promise.
But most penny stocks don’t make it to the big leagues. And because they are so “cheap” at just pennies are share — and very illiquid — it’s easy for scammers to pump-and-dump these issues. All in all, penny stocks might look like some of the best cheap stocks to buy now, but they’re very risky and could cost you dearly.