Penny stocks often trade infrequently and carry many other traits that may cause excessive volatility. Some penny stocks perform well, which helps them remain attractive.
Penny stocks have a propensity to either give high consistent returns or get wiped out if the company can’t sustain its business. Thus, penny stocks are volatile, with high reward potential and risk.
The risk factors such as economic slowdown, and an uptick in volatility are analyzed carefully to provide a long-term view of the company.
