It's not uncommon for inexperienced investors to go through a penny stock phase. The rationale is understandable: You can own hundreds or thousands of shares of a company that trades for a few cents a pop.
It seems like a great deal, especially in the dreamy scenario where the stock appreciates. The problem is that many penny stocks trade in that low range for good reasons. The businesses usually aren't legitimate, have glaring red flags, and are probably too small to be publicly traded in the first place. To be blunt, penny stocks usually go bust, not boom.
That doesn't mean investors have to shun all high-risk stocks as they gain experience. In fact, it can be exciting to own under-the-radar stocks with the potential to pop -- so long as risky stakes are balanced out responsibly. If that sounds appealing to you, then consider taking a closer look at Mesoblast (NASDAQ: MESO) and Selecta Biosciences (NASDAQ: SELB).