Speculative stocks are those that investors buy knowing that they could lose most of, if not all, their investment. However, they also believe (or speculate) that these companies may produce life-changing returns to the upside.
Many companies associated with these stocks have a business model with a perceived likelihood, but not a guarantee, of success. Many also trade as penny stocks. Some have poor fundamentals, including, in many cases, being unprofitable. And, as you would expect, many of these companies are small-cap companies that may fly under the radar of analysts.
Nevertheless, speculative investors are drawn to these stocks because they perceive something in them that they believe the market may be missing. Plus, the fact that many come with a low stock price makes them more volatile, allowing a trader to exit a position quickly.
Unsurprisingly, many speculative stocks are found in areas such as mining, biotechnology, and technology. And since 2009, you can add Bitcoin stocks and cryptocurrency to this list. To illustrate this point, 18 biotech companies declared bankruptcy in 2023. That was a 10-year high, which topped the previous ten-year high of eight, which was set in 2022.
In this presentation, we're highlighting seven speculative stocks. We'll highlight each of their potential use cases and explain the risk to investors.
Click the "Continue to Slide #1" button to view the first company.
