In this edition of The Motley Fool's "Ask a Fool" series, Motley Fool One analyst Jason Moser and Motley Fool Stock Advisor analyst Brendan Mathews take a question from a reader who asks: "I do not have a huge trading account, so I am looking for penny stocks to swing trade. Does anyone on the Motley Fool trade penny stocks?"
In response, Brendan points out the huge hazards with penny stocks. Most micro-cap penny stock companies shouldn't even be public: If their promise was equal to their promotion, they'd be funded by management or smart venture capitalists. Unfortunately, most penny stocks exist exclusively to dupe investors. With penny stocks, it's very important to tread with caution -- or avoid them altogether.
Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
More from The Motley Fool
Just How Big a Social Security Hit Do Early Retirees Take?
Find out the two ways that early retirement affects your benefits.
How Do Government Shutdowns Affect the Stock Market?
Here's how stocks performed during three major government shutdowns in 1995, 1996, and 2013.
Here's Where Things Went Wrong for Nike, Inc. in 2017
Nike's stock didn't have a bad year, but there are some operational challenges starting to show up for the company.