Do Cheap Stocks Yield Anything?

Cheap stocks

You want to invest €1000 in shares . Do you buy several shares at a cheap price? Or do you invest this entire amount in just one or part of a share? What will give you the most in the end? It is more tempting to go for the cheap shares. At first it seems that you get more value for your money with cheap shares. But is this true?

Why are those cheap stocks so cheap?

If you think about it for a moment, you will quickly realize that companies do not simply sell their shares cheaply. This company is probably not doing well. They may see their market share shrink in the future or they may have debts. There is a chance that they will recover and that their shares will suddenly skyrocket, but the chance of bankruptcy is much greater.

Should you buy expensive stocks?

Expensive shares are often seen on foreign stock exchanges. Think of Apple or CocaCola. In Europe, expensive shares are often split, but in America this is not done. In cases like this, you can see from the high price that it is a quality company.

Can you invest with small amounts?

You can start investing with any amount. To invest with a small amount in cheap shares, you just need more patience. Suppose you only have €50 to invest, then you can buy 1 share of Total, for example. If you hold this share for a long period, you may be able to sell it at a profit. You take relatively little risk with this, but your profit will also be low.

Another way to invest is to buy Penny stocks. These shares usually cost only a few cents. With €50 you can buy a lot of shares of the same company. If the company suddenly starts doing better, you can quickly earn a lot of money this way. The risk is much higher here because there is of course also a chance that it will happen the other way around. But thanks to your limited investment of €50, you do not lose much money. When buying Penny stocks, you better look for low transaction costs because of the risk.