Why do so many people invest in penny stocks?
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Filed under: Retirement Planning
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I think it’s a highly optimistic attitude and personal greed, that one could double or triple their money in short time.
Penny stocks are a shot in the dark because the company usually faces liquidity issues and have very limited reputation. But hey, the stock could shoot up just on one snippet of good news…unfortunately, it could go the exact opposite just as easily.
The same reason people play the lottery
because it’s not investing it’s gambling:People like to gamble.
When a 100 dollar stock goes up 10 cents it’s no big deal. When a 10 cent stock goes up 10 cents it has doubled. They forget that it going up 10 cents is highly unlikely.
Others get turned on by the idea of buying 10,000 shares of something.