answersLogoWhite

0

Junk stocks or Penny stocks are stocks of companies that are relatively new or very small. These companies are not fundamentally sound and do not follow efficient management practices.

The chances of these companies posting good results and profits is low but since the price of these stocks are very low some people with heavy risk appetite invest in them.

Since the chances of making money by investing in these low value stocks they are called junk stocks or penny stocks.

User Avatar

Wiki User

16y ago

What else can I help you with?

Related Questions

Why buys bonds and not stocks?

Bonds and stocks serve different purposes to the investor, and ideally you should buy both. Advantage of investment-grade bonds: the issuer is committed to paying you a stated amount of money on a stated date. The disadvantage is your return is limited to the agreed-on amount. Advantage of stocks: potentially unlimited return on your investment. The disadvantage is there are no guaranteed returns with stocks; you could potentially lose everything you invested in them. Speculative-grade bonds, or "junk bonds," have a risk/reward system more like stocks than investment-grade bonds.


Kinds of stocks?

there are: Common stocks Preferred stocks 05/08/08 there are: Common stocks Preferred stocks 05/08/08 there are: Common stocks Preferred stocks 05/08/08


Name a 2-word term that starts with junk?

Junk Yard Junk Food Junk Mail Junk Pile Junk Drawer


What is the difference between penny stocks and cent stocks?

There is no difference between penny stocks and cent stocks.


Till stocks lasts or till stocks last?

till stocks last


What alternatives to corporate stocks and bonds do securities firms offer?

These vehicles included municipal (state and local) bonds, junk bonds, options, mutual funds, asset and mortgagebacked securities, futures, and real estate investment trusts.


What is more risky stocks or bonds?

Stocks.


How do you find out if you have stocks?

sprint stocks how to locate if you have them


What are inactive stocks?

Stocks that don't fluctuate


How can you be a part of the stocks mark?

buy stocks


What is a sentence for the word stocks?

Stocks have lost their value. You should not buy Stocks.


Where can I find free report for small cap stocks and penny stocks?

The Small Cap Stock Report is a great free service for small cap stocks, micro cap stocks and penny stocks.