Investing in penny stocks - generally, stocks that trade for less than $5 per share or have small market caps and low floats - can yield standout returns, due to their potential for significant capital appreciation. However, it's important to note that penny stocks are inherently high-risk investments and can be volatile. Many such companies tank, leaving investors to lose their capital.
However, the growing chorus of analysts warning that more established, larger-cap stocks look overpriced right now makes penny stocks seem particularly appealing for investors wary of a possible correction.
