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People avoid Penny stock because price can be volatile and can be easily manipulated, traded in low volume, reliability and earning capacity is very low.
People avoid penny stocks because of the high volatility and less transparency and liquidity of the stocks.
Sometimes the possibility of scam is high.
As penny stocks are traded in low volume, it is easier for someone to manipulate its price so people tend to avoid penny stocks.
Penny stocks are traded in very less volume and they do not follow the market trend, so it is advisable to avoid penny stock.
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