9 Investments You Should Never Make

1) Penny Stocks
Every couple of years or so the penny stock craze comes back in full force as someone writes a book or starts a blog about how they made millions in penny stocks, often touting they did it on their last fifty bucks—and for a small price they’ll generously share their secret.
I’m not saying penny stocks are a scam, however, many of these penny stock “millionaires” are make their money from selling “how to” books rather than penny stocks. Logically, without a detailed evaluation, the theory behind penny stocks seems to make sense. You have a stock less than five dollars which appear to be affordable. If you buy enough of the stock, any significant growth will net you a quick return. This is especially true when it comes to stocks under a dollar. For example, if you buy 200 shares of a $.50 stock, you spend $100. When that stock gets up to a marginal price of $5, you now have $1000 worth of that stock. It’s that easy right?
The catch is that penny stocks are low for a reason. This could be because of financial problems, bankruptcy, a bad product or a bunch of other reasons. Your chances of failure with penny stocks is much more likely than your chance of success, or even breaking even.

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