For many investors, getting involved with pharmaceutical stocks involves finding inexpensive stocks, often penny stocks, in hopes of investing in a breakthrough treatment for cancer, Alzheimer’s disease, or a rare disease. It’s understandable; finding stocks like these could lead to life-changing returns.
But investing this way requires more than a high risk tolerance. Even for companies with a “sure thing” in the pipeline, it can take years to move a drug through the clinical trial stage. During that time, stock prices can be affected by traders attempting to aggressively buy or short the stock.
