Listen Money Matters - Free Your Inner Financial Badass. All The Stuff You Should Know About Personal Finance.

What is a penny stock?  Can they make you rich?  Well, it worked for our guest Timothy Sykes who turned $12,000 into $4.2 million by trading them.  Timothy took his bar mitzvah money and started trading penny stocks against his parent’s wishes. What they warned him would be a hard lesson in the value of a dollar, turned into a small fortune.  What Is A Penny Stock?  Penny stocks are stocks sold by speculative companies for under $5 per share. Penny stocks are usually growing companies that have limited cash and resources or companies in dire financial trouble, often already in bankruptcy. As such, they are much riskier than traditional stocks. You don’t trade penny stocks with the intention of finding the next big thing, rather, you’re trading momentum. If you’re wrong about a pick, get out fast. This is not a buy and hold discipline.  When a “conventional” stock is down, over time, it’s likely to bounce back. That’s not the case with penny stocks. The companies often go out of business before a bounce back c