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  • Writer's pictureMatt DeLong

As a new trader, what is good to invest in: a blue chip stock or a penny stock?

Depends if you like calm smooth rides (blue chip) or crazy roller coasters (penny stocks).

Calm/smooth losses are also required to achieve calm/smooth gains. Crazy roller coaster penny stocks LOSSES are required to achieve crazy roller coaster GAINS. Penny stocks also tend to be manipulated because of the “small float” (small number of shares available to buy/sell).

I have a few trader friends who do both — I prefer neither. I prefer the small/mid-cap stocks, which is more of an “in the middle” approach to these two. There are always exceptions.

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