Some of the most expensive stocks out there are under $2! It seems that many new investors fall into this trap. It's all about the % gain on your money and not how many shares you can grab. When you have limited funds to invest it's ALL about finding stocks that will give a nice % gain and stocks priced under $5 are priced as such for a reason.
These "low" priced stocks are having problems of one kind or another and the market has them priced this way for a reason. Let's say you have $1000.00 to invest. No matter what you do, $1000.00 is still $1000.00! It doesn't matter if you own 10 shares priced at $100 each or if it's 1000 shares priced at $1.00. No matter how you slice it, the capital you have at risk is still $1000.
OK, so why the love of stocks under $2? I have seen more folks show love for stocks that are under $2 than AAPL when it was priced @ $100 in mid March. Yet AAPL, a real company that most folks know exactly what you get is always said to be priced too high for folks.
Meanwhile AAPL just had a huge run to over $133! That's a 33% gain in about 2 months! And the run was actually higher than that if you got in when AAPL was under $100! How many of those $2 stocks can hold these type of gains out there?
My point is a simple one. We want to look at % gains that are possible and not necessarily the stocks that are only under $2 so that we might hold a lot of shares. Keep an open mind to the potential of all stocks because you never want to limit yourself to opportunities as they present themselves to us.