When considering stocks to buy, sometimes cheaper (and smaller) is better.
Popular tech behemoths like Google, Inc. (NYSE: GOOG) and Apple, Inc. (Nasdaq: AAPL) now trade for hundreds of dollars a share, making them impractical stocks to buy for small investors.
Most retail investors are better off taking a pass on those splashy household names and looking for stocks to buy that go for more modest prices – stocks that trade for less than five bucks a share.
Stocks trading for $5 or less often are considered riskier, but offer more upside than their bigger, pricier brethren.
That's because stocks of small companies are less liquid and more volatile relative to the rest of the market. Typically, their prices tend to be move in bigger chunks, making for bigger gains (or losses).
Simply put, these stocks can provide more bang for your buck.
Here's what you need to know…