Why It Does Not Make Sense To Invest In Penny Stocks For Hopes Of Higher Returns?

In this video, Ruchit Jain, Vice President and Head of Equity Technical Research at Motilal Oswal Wealth Management, shares his expert views on why penny stocks should be avoided, irrespective of whether your investment size is ₹5 lakh or ₹5,000. He explains the common misconception that low-priced stocks offer greater upside potential and clarifies that portfolio gains are driven by percentage returns, not stock price. Ruchit advocates focusing on high-quality stocks with strong fundamentals and highlights a few current investment opportunities that look promising from a technical and long-term perspective. These include large-cap names like Larsen & Toubro, along with defence sector plays such as Bharat Electronics. He also sees potential in Cummins, which is showing signs of a positive breakout after a prolonged consolidation phase.