As for Investment point of view, A stock investor many times heard about Penny Stocks, penny stocks are also called Low Priced stocks.
Today, we will talk about Penny stocks?
What are PENNY STOCKS?
Penny Stocks in the Stock Market are called Stocks, which are generally much lower, and the market capitalization of the Penny Stock Company is also much lower.
If you talk about the value of penny stocks in India, then generally the value of Penny Stocks can be from Rs. 1 to Rs. 25, the market cap of Penny Stock companies is less than or equal to 100 crores or Small Cap Company.
There is no definitive way to know which company’s stock is penny stocks, Penny Stock is a term used for the stock price in a stock market.
Usually, it is important to check the company’s market cap to find out the penny stock, the market cap of the Penny Stock Company is less like or smaller than the Small Market Cap company, and its stock is below Rs. 25.
Advantages and Disadvantages of PENNY Stocks
This stock is very attractive to investors, due to low and cheaper prices of Penny Stocks.
Investing in Penny Stocks seems very good and right because a lot of money is paid in less money, For example – if you have Rs 10,000, you can take only 20 rupees for 20 rupees, whereas if you take 10 rupees, you get 1,000 shares.
And in this way if you have bought 1000 shares of Rs 10, then if the share grows by 1 rupee then you can benefit from 1000 while taking 20 shares of 500 rupees when it will increase 50 rupees, then you will gain 1000.
On the other hand, it is also worth noting that if you face a loss of 1000 rupees in the value of 1000 rupees, you can have a direct loss of 1000 rupees, while 20 rupees in 500 rupees will decrease by 50 rupees only if you get 1000 Will to be lost.
When buying penny stock, the investor feels that the share of Rs 10 can easily be Rs 20, while going for a share of 500 rupees can take a lot of time.
Therefore an investor needs to think all these things while investing over in penny stocks.
Penny stocks seem to be very attractive to a common man, and it seems that penny stocks have been made for the common man, and often the common man loses money in the stock and their capital is sung.
Let’s understand with an example, Like today, a share of MRF LIMITED company is Rs 65000, which is very difficult to buy for a common investor.
Even if a common investor has 65000 rupees, he will never take a share of MRF, while on the other side If the share is trading at Rs 13, then a common investor will easily get attracted towards that low-value share.
After understanding about Penny Stocks, there are two questions now,
First of all, should we invest in Penny Stocks or not, so the answer is, can be invested, but if the stock market expert believes, then a very small portion of our portfolio is less than 5% Should invest in stocks.
The second question is whether investing in Penny Stocks is absolutely safe – the answer is, not at all.
There is no guarantee of capital protection in investing in the stock market, and especially when you invest in penny stocks, due to the small penny stock company being short, come to the brink of drowning early due to any financial crisis.
About PENNY STOCKS Company There is usually no NEWS in the market, due to which investing in these companies becomes even riskier as manipulation can be done very easily in the stock of these companies,
Typically, the tips provider tells the stock of a similar company, which is a PENNY stock, and later it plays a game of manipulation.
Therefore investing in penny stocks should be carefully cautious and should periodically review its INVESTMENT.