8 Investment Mistakes That Will Make You Broke

3) Penny Stocks

The description of penny stocks has changed over the decades from stocks worth only a few pennies (hence the name) to stocks as high as five dollars. There are hundreds of books and websites dedicated to selling potential investors on the benefits if investing in penny stocks. Unfortunately, the people selling those tips make more money on their books than on following their own advice.

People have made money investing in penny stocks, but millions more have lost a lot of money. The get-in get-out philosophy is a hard one to win with in investing. However, every year people lose a lot of money on these stocks. After all, the reason the stock prices are so low is that these companies have not attracted the attention of investors. This could be a matter of a new company who is not yet tested, or a company that is/has been tested and not done well.