This is Optimal Finance Daily, episode 1433, Penny Stock Debacle.

How I lost $5,000 and how you can and better avoid it by Jeff Rose of GoodFinancialSense.com.

And I'm your host and personal finance enthusiast, Diana Mariam.

This is the show where I read to you from some of the best personal finance blogs on the planet,

sometimes a little too enthusiastically. Do you have a question you'd like answered here on the show?

Go ahead and send it over to Finance at OLDPodcast.com and you'll hear from me soon.

Even if your question isn't answered on a Q&A episode, I do my very best to answer every email.

But for now, let's get right to it and continue optimizing your life.

Penny Stock Debacle How I lost $5,000 and how you can and better avoid it by Jeff Rose of GoodFinancialSense.com

I get sick when I think about that day and the mistake that cost me $5,000.

I compare it to something in between smashing my thumb with a hammer to breaking your mother's

most beloved piece of China. It is something that makes me sick just reliving it.

I actually just puked in my mouth a little bit. Ugh.

I've been a financial advisor for almost four years, so I should have known better.

But thanks to a lot of greed and even more ignorance, I got my rear-handed to me on a silver platter.

The Temptation I was meeting with a client who was telling me a story about their

daughter's boyfriend, whose dad worked for some mining company.

Do you see how bad this starts off? I usually make fun of people that would even entertain

stories like this. And here I was caught up in the moment. Back to the story.

The client was telling me how this company had just signed some new deals and since it was a

penny stock, otherwise known as OTC or over the counter thinly traded security, there wasn't a lot

of news about it. His theory was that this penny stock could soar pretty quickly.

...