What is a Penny Stock? by Jeff Rose of Good Financial Cents on Stock Market Education

From Optimal Finance Daily - Financial Independence and Money Advice Optimal Living Daily | Diania Merriam

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Episode 3637:

Jeff Rose explains what penny stocks really are, why their low price can be misleading, and how their lack of liquidity and reporting requirements make them especially risky. He also breaks down common "pump and dump" scams so you can recognize the warning signs and make more informed investing decisions.

Read along with the original article(s) here: https://www.goodfinancialcents.com/what-is-a-penny-stock-scam-pump-and-dump/

Quotes to ponder:

"Every time this occurs I always sigh to myself and think, “Sure it is”."

"What makes penny stocks so risky is their lack of liquidity."

“People who responded to the ‘pump and dump’ scam lost 8% of their investment in two days. Conversely, the spammers who buy low-priced stock before sending the e-mails, typically see a return of between 4.9% and 6% when they sell.”

Episode references:

OTC Markets Group (OTCBB/Pink Sheets information): https://www.otcmarkets.com/

U.S. Geological Survey: https://www.usgs.gov/

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