According to the Federal Government, all major stock exchanges, all major brokerage firms, all securities regulators. all industry professional, all respectable brokerage firms - penny stocks ARE NOT SAFE
No stock has moved from $0.02 to $5.00 overnight - there have been many mis-prints, and stories by "pumpers' but it has not happened in the real world
No penny stocks is considered safe, and no registered broker/dealer is permitted to recommend any to you
Please, please...name me ONE penny stock that has gone from 2 cents to five bucks overnight. Name one. I dare you.
Penny stock investing is a sham. Go see The Wolf of Wall Street. Most penny stock companies are shell corporations that do no business. They are designed to attract investors for a short period, during which the owners spend all the capital invested (or pay it to themselves) and then the stock goes down to nothing.
Do people make money on penny stocks? Yes - maybe one person in two hundred. The other 199 lose it all.
No. Penny stocks are not "safe."
Novice investors make the very critical mistake that a penny stock is a company that is just starting out or immature and just waiting to bust out. In fact, most penny stocks are priced so cheaply because the value and fundamentals of the underlying company is basically junk. The companies normally have very high debt, negative retained earnings, bad management, etc. Most penny stock companies will not be around for the long term as they are mostly smaller cap stocks, which have an extremely high long term failure rate. A penny stock is MUCH more likely to lose all of its value over the long term, than to make money. They can be fun to play with using small amounts of money, but NOT a very wise investment tool.
You might want to read this article about penny stocks, they are highly speculative and risky.
http://en.wikipedia.org/wiki/Penny_stock
It would help if you would first define "safe."
Bank deposits and money market instruments like CD's are "safe," but no stock is considered "safe." Treasuries are "safer" than stocks. But in the realm of stocks only, some stocks are "safer" than others, like utility companies and high dividend yield stocks. Also, low volatility stocks with a low Beta are considered "safer". You can find beta on the right side of this screen by clicking on Key Statistics of the company on the left sidebar. A beta of less than 1 means that the security will be less volatile than the market. JNJ has a beta of just 0.57
http://finance.yahoo.com/q/ks?s=JNJ+Key+...
http://www.investopedia.com/terms/b/beta...
Cheap And Safe Stocks To Consider
http://www.investopedia.com/stock-analys...
4 Income Stocks Safer than Treasuries
http://www.investopedia.com/stock-analys...
The lottery is a better bet.
Learn about pump and dump operations. you will only hear about "pumped" stocks. and after you buy them you will get the "dump".
Its good that you lose money on them now, so that way you can help educate others in the future on why not to invest in them.
Not remotely safe. These are VERY risky investments, and MOST go belly-up.
are penny stocks safe? and how come they can go from 2 cents to 5 dollars overnight?? and if so how do you know which are and which are not?
