Stocks can be a powerful way to grow your wealth, but they come with significant risks if you don’t approach them strategically.
One of the biggest mistakes people make is falling for low-liquidity, microcap stocks - stocks that have little market activity and is often hyped up by scammers that lure people into buying, typically on ADs on Instagram and Whatsapp. For example, OST (Ostin Technology). The danger isn't necessarily in all micro-caps, as most investors speculate on their high risk / high reward growth. But specifically in those that are purely speculative vehicles lacking any fundamental value.
Price Manipulation: Low-liquidity stocks are easier to manipulate. A small group of people can artificially inflate the price, luring in unsuspecting investors.
Difficult to Sell: If you try to sell a low-liquidity stock, there might not be enough buyers, leaving you stuck with the stock or forced to sell it at a massive loss.
Stick to Liquid Stocks: Focus on stocks from well-established companies or ETFs (exchange-traded funds) that have a high volume of trades. These are much easier to buy and sell without drastic price changes.
E.g Nvidia, Meta, Apple, Microsoft. These are all blue-chip stocks that is less risky and is hard to manipulate.
Long-Term Investing: The key to success is buying and holding. Invest in companies with strong fundamentals that will grow over time. This reduces the impact of short-term market fluctuations.
Investors considering short-term positions must recognize the speculative nature of this approach. The significant daily price fluctuations in these stocks make them incredibly unpredictable and is VOLATILE, rendering any strategy based on market timing exceptionally challenging.
In the stock markets, either the market f**ks you or the people do.
Disclaimer: Everything on this page is for informational and entertainment purposes only - none of it is financial advice.