Don't Waste Your Money on Penny Stocks; These 3 Stocks Are Better Buys

The prevailing wisdom in investing seems to be "buy low, sell high." This is easy to say but very tough to do. The problem is that investors tend to gravitate toward cheap stocks to "buy low," not realizing that buying cheap stocks is not the solution for their investment portfolio woes. Many end up scouring the bargain bin for penny stocks that they believe may suddenly shoot up, multiplying their wealth many times over.

The danger with this sort of thinking is that you may end up with a bunch of lemons that are cheap for a very justifiable reason. Penny stocks are so named for a good reason. Some may have fallen on tough times and are unable to recover their former glory, while others could just wallow in mediocrity for years to come, lacking the spark that can take the business to a higher level.

These are the reasons you should be willing to pay up for great companies. While some may not be cheap using traditional metrics, their long runway for growth and dominant market position still makes them way more attractive than the penny stocks. Here are three that I believe can provide you with more bang for your buck.

Source Fool.com