I've recently become interested in penny stocks as a potential investment opportunity, and I'm trying to wrap my head around the risks and rewards involved. I understand that penny stocks are typically low-priced stocks of smaller companies, but I'm curious about a few things:
- What are the common pitfalls to watch out for when investing in penny stocks?
- How do you differentiate between a potentially good investment and a pump-and-dump scheme?
- Are there any specific industries or sectors where penny stocks tend to outperform?
- What's a reasonable percentage of a portfolio to allocate to penny stocks for someone who's new to investing in them?
- Any recommended resources or strategies for researching and selecting penny stocks?
I’d love to hear your experiences, tips, or any cautionary tales you might have experienced. Thanks!
