5 reasons to avoid penny stocks at all costs
Yahoo! - 03/29/2016
“At the track there is usually a reason a horse is a long shot: it can’t run fast,” says Jeffery Born, professor of finance at the D’Amore-McKim School of Business at Northeastern University. “Penny stocks are the long shots of the investing world. For every one that pays off big, there are many, many more that don’t.”
Instead of betting on the underdog, investing in a diversified basket of well-capitalized, proven businesses — members of the Standard & Poor’s 500 index, for example — improves your odds dramatically. You’re no longer blindly playing the slot machines.
If you’ve managed to play the penny stock game and you’ve gotten out alive, count your lucky stars. Then run for the hills and never look back.