Penny stocks hold tremendous opportunities for investors. These are inexpensive stocks of firms with a relatively small market capitalisation. Most of the penny stocks are newly listed companies. The low cost and potential growth opportunities often attract investors.
Before investing in penny stocks, it is advisable to do thorough research. This is because these investments are riskier than investing in other listed stocks or ETFs, and they rarely pay any dividends. Penny stocks are highly volatile, which gives more earning potential and risk simultaneously as several penny stocks never grow in the market.