Warning: penny stocks are for speculators

BREAKING:  SEC Halts Trading In 17 ‘Penny Stocks’

IFO hasn’t tackled this subject yet, but there’s no time like the present. Penny stocks are low-priced, lightly-regulated stocks in companies with sometimes shaky business models.

We normally abhor regulatory actions and don’t condone the SEC’s action this time, but do consider this an appropriate time to warn our readers about these stocks, which have a long and dishonorable history.

Here’s a quick quote from the WSJ article linked above on this: “Microcap stocks are vulnerable to fraudulent schemes because it is often easy for a bad actor to gain control over a large portion of the shares, hype the company to investors based on misleading information and then dump the stock.”

If you are thinking of buying a penny stock, please research the heck out of the whole thing. If you can’t get any legitimate, non-company produced or funded information, stay away. Don’t fall for the greater fool theory of investing!


About InvestingforOne

I've been investing in various assets by myself using a discount broker for many years. Over that time, I've developed some theories that others might find useful. Plus, there is more to investing than money. Time, talent, work, friends, family all go into developing a good and satisfactory strategy.
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