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Ng Li Xuan

Ng Li Xuan

Level 5·Business Information System at University Of Wollongong

14d ago

Should I buy many different penny stocks where I can more a fair amount or do I save up to buy 1 growth stock?

Investing in stocks advice!

I don’t have much savings and it will take awhile to save up to 1 stock. So is it better if I start buying penny stocks now or wait?

13

    Discussion (13)

    What are your thoughts?

    Jared Lee

    Jared Lee

    Edited 14d ago

    Level 5·Analyst at Venture Capital Fund

    Penny stocks as their name implies, are usually stocks that trade below $1. Different regions have different definition of 'penny stocks' Hence not all stocks that are below a dollar are penny stocks. Would definitely help if you could define which country/exchange you're looking at.

    Singapore has a few small caps/mid caps stocks that trade below $1 but would definitely not fall under the definition of penny stocks. i.e Sembcorp Marine.

    If you're referring to the U.S markets. Then Penny stocks are definitely stocks below $1 but there's a very good reason. They're crappy companies ( usually a lot of biotechs) and when a stock in the U.S exchange falls below $1, they usually get a Delisting warning and they will have 180 days to get their stock back above a dollar if they want to continue trading on the open markets, or else they will delist and trade on the OTC(over the counter) markets. These are lightly regulated and illiquid A.K.A bye bye to your hard earned money.

    As a new investor, i would start out with the home markets and test my risk tolerance and appetite before venturing overseas. OCBC has a bluechip investment plan where you an set aside $100 regularly every month, good and relatively 'safe' alternative to savings/investing. That's kind of where i started and as i got comfortable watching those gains and losses, i started to buy into 'livelier' markets.

    If you have a lot of time, then single stock investing is going to outperform an index by A LOT. But this requires an in-depth knowledge of the Markets, sectors, fundamentals and a good knowledge at reading financial statements and valuing these companies

    If you don't have time or don't want to read too much into this, stick to an ETF. And although a popular opinion around here is "VOO" i.e the S&P 500 i'm going to go against the majority and say that the U.S should be one of the focus but never become THE focus. Hence a global index would be a better play here.

    Disclaimer: Not Investment Advice. Always do your own research & seek a qualified opinion before making any investment decision!

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      Hi Li Xuan,

      Maybe it will be good to understand that stocks are not lottery tickets, behind every stock, there is a real business.

      Stock A vs Stock B will be different because of the underlying business. The price of a stock does not tell us much about the underlying business we are investing in.

      I think picking stocks should not be based on it's stock price alone and certainly not picking it because we can afford it and not another business

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        No long term investor will own penny stocks. High chance buisness go bankrupt and u lose everything....

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