Penny stock burn

Go Solar USA was the first stock I ever owned. As I write this, it trades at $0.006 per share, and it taught me what a lot of experts say about penny stocks: You can’t get rich overnight. — C.S., online

The Fool responds: Many experts consider penny stocks far too volatile and dangerous for investors, and we have long warned against them ourselves. (A penny stock these days is one trading for less than about $5 per share.) But they continue to attract many investors — typically naive ones.

If you have $1,000 to invest, for example, being able to buy, say, 10,000 shares of a $0.10 stock can seem better than buying 10 shares of a $100 stock. It can seem like you can get rich overnight with such seemingly bargain-priced stocks. But even low-priced stocks can fall, and penny stocks often do. Indeed, Go Solar USA’S shares have recently traded as low as $0.001 per share and have been volatile.

If you’d wanted to invest in solar energy, a better move would have been to pick a few established, growing and profitable solar stocks — or a mutual fund or exchangetraded fund (ETF) that focused on solar energy companies or alternative or renewable energy companies. Two ETFS to consider, especially if their prices retract a bit, are the Invesco Wilderhill Clean Energy ETF (PBW) and the ishares Global Clean Energy ETF (ICLN).