tl;dr: List papers in review but don’t list papers in preparation.
I strongly recommend that junior scientists (and even senior scientists) list submitted papers on their cv. The main reason is the inevitable delay between when a project is done and when a paper finally comes out. If I see a cv with no publications in the last year, I don’t know if that is because the person got lazy or because there are five papers in the pipeline that just haven’t made their way out of review yet. If I see a couple of papers listed as “submitted” or “in review” it gives me confidence that the person hasn’t gotten lazy yet. Also, from the titles of the papers, I can get a sense of where the person’s work is going at the moment.
Some might be concerned that a paper that isn’t formally accepted isn’t quite a paper yet, since it doesn’t yet have the official stamp of approval. Therefore it shouldn’t be on the cv. After all, it might never see the light of day. This kind of reasoning does not really reflect reality. As far as I can tell, if a paper has been submitted it might as well have been published, because realistically most papers that get submitted will get published eventually. I have published over 100 papers, and throughout my entire career I can recall maybe 3 or 4 cases where I gave up on a paper after review. I see similar statistics as a reviewer or editor: Most papers that come my way and that I consider to be of insufficient quality to appear in print do so anyway, eventually. So I’m going to argue that maybe 5% of papers get submitted somewhere but never formally appear, while the remaining 95% are on track to becoming published works. I’m a theoretical physicist, and to me 95% is close enough to 100% that I don’t care about the difference. Once a paper has been submitted, I count it as a published paper.
The argument becomes even stronger if a senior scientist is a coauthor on the paper. If that senior person generally publishes solid works, and if he or she agreed to submission of the article with their name on it, chances are it is a solid piece of work as it currently stands. Reviewers may still have some issues that they’re going to nitpick over. However, realistically reviewers are wrong as often as they are right, and why should I give more credence to some random, anonymous reviewer than to the senior person whose work I respect?
There is one caveat, though: The number of papers listed on your cv as “in review” should be commensurate to your typical publication output. If you have published two papers a year for the last three years and you list 20 that are in review, I will be skeptical about the quality of those papers and will wonder whether maybe your success rate from submission to publication is not near 100%. But if you usually publish two papers a year and you list three in review, that looks reasonable and I won’t give it a second thought.
I view papers “in preparation” differently, however. “In preparation” means nothing. A paper that is submitted must have gotten to the point where at least one, and usually several, scientists felt it could be published in principle. A paper in preparation could be nowhere near that point, and it might never get there. I certainly have had plenty of papers in my life that were “in preparation” and eventually transitioned to “nobody even remembers what the project was supposed to be about.” If I listed all of those papers on my current cv, it’d probably be twice as long and half as useful. If you have a paper in preparation that you really want to list on your cv, then hurry up, get it done, and submit it. And put it on a preprint server, too, so you and others can cite it.