Speculative Stock

Posted in Finance, Accounting and Economics Terms, Total Reads: 672

Definition: Speculative Stock

Speculative stock is a risky stock which may have ability to provide high returns.

Why would any investor even look at such stocks?

The answer is that there is the returns may be high eventually. These stocks are mostly from companies which are not very well known and documented. That is the reason the offer price might be low. But the whole reason that these exist are that the low price may help you get high returns. These become risky if you buy large quantity of such speculative stocks and then lose the money.

A necessary condition for investing in speculative stocks is a high tolerance for risk. 

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