What kind of stocks should I avoid?

You should avoid investing in stocks with low liquidity. There are a number of small-cap stocks where the prices may be continuously falling, but the investors are not able to sell that stock just because there are no buyers.  Avoid investing in companies with low liquidity.

Further, for the beginners- I would also advise avoiding investing in penny stocks. These companies are very risky and prone to different scams like pump and dump etc.

Also read: What are Penny stocks? And should you buy it?

 

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