Why Buying Cheap Stocks Is the Wrong Investing Strategy

Buying cheap stocks doesn't necessarily mean buying valuable stocks, and buying a stock at its low is no guarantee that you've made a good deal. In examining one definition of the term, "cheap stock" can simply mean a stock with a low share price. Stocks with slightly higher prices, in the $5 to $30 range, are still relatively "cheap" compared to the Berkshire Hathaways (NYSE: BRK.A) of the world -- but we'll soon learn that stock price alone is not determinant in a buying decision.