Editor: Paul Mladjenovic
Publisher: Wiley Publishing, Inc.
Reviewer: Goke Ilesanmi
One of the fastest and easiest (though also risky) routes to achieving financial sufficiency is stock investing. It is therefore important for us to X-ray this book christened “Stock Investing for Dummies” to educate people on stock investing. It is written by Paul Mladjenovic, a certified financial planner (CFP), consultant, writer and public speaker.
According to this author, stock investing is a great topic that is fascinating. Mladjenovic says although the stock market has served millions of investors for nearly a century, recent years have shown that a great investing vehicle such as stocks can be easily misunderstood or even abused. He educates that the great bull market of 1982 to 1999 came to a screeching halt in 2000. This consultant says investors at the tail end of a bull market often think that stock investing is an easy, carefree, mindless way to make a quick fortune.
This text has five parts of 24 chapters. Part one is generically christened “The essentials of stock investing” and contains five chapters. Chapter one is entitled “Exploring the basics”. In the words of Mladjenovic here, “Stock investing became all the rage during the 1990s. Investors watched their stock portfolios and mutual funds skyrocket as the stock market experienced an 18-year rising market (or bull market). Investment activity in the United States is a great example of the popularity that stocks experienced during that time period….”
This author adds that the stock market is a market of stocks and a market like any other market. “The stock market is an established market where people (investors) can freely buy and sell stocks because they seek gain in the form of appreciation…or income…or both,” educates Mladjenovic.
Chapter two is based on taking stock of your financial situation and goals. Here, this author says investing in stocks requires balance, but investors sometimes tie up too much money in stocks and therefore put themselves at risk of losing a significant portion of their wealth should the market plunge. He adds that then again, other investors place little or no money in stocks and therefore miss out on excellent opportunities to grow their wealth. Mladjenovic says a disciplined investor also has money in bank accounts, bonds, mutual funds, etc.
In chapters three to five, Mladjenovic discusses concepts such as defining common approaches to stock investing; recognising the risks and getting a snapshot of the market.
Part two is summarily woven together as “Before you get started” and covers four chapters, that is, chapters six to nine.
Chapter six has the thematic focus of gathering information. Here, this author educates that knowledge and information are two critical factors in stock investing. He expatiates that people who plunge headlong into stocks without sufficient knowledge of the market in general, and current information in particular, quickly learn a negative lesson.
In chapters seven to nine, Mladjenovic analytically X-rays concepts such as going for brokers; investing for growth; and investing for income.
Part three is based on the eclectic subject matter of picking winners, and contains four chapters, that is, chapters ten to 13.
Chapter ten is entitled “Running the numbers: Using basic accounting to choose winning stocks”. Here, Mladjenovic says stock picking can seem like a combination of art, luck, timing, and science. He stresses that when you turn to the so-called experts, you get all sorts of opinions, which frequently are contradictory. The most tried-and-true method for picking a good stock starts with picking a good company, Mladjenovic advises.
In chapters 11 to 13, this expert discusses concepts such as decoding company documents; analysing industries; and money, mayhem, and votes.
Part four is generally tagged “Investment strategies and tactics” and covers six chapters, that is, chapters 14 to 19. Chapter 14 is entitled “Taking the bull (or bear) by the horns”. According to Mladjenovic here, understanding the investment environment may even be more important to your wealth-building success than choosing the right stock.
Chapters 15 to 19 are based on the subject matters of choosing a strategy that is right for you; stopping in the name of money; getting a handle on DPPs, DRPs and PDQ; looking at what the insiders do; and tax benefits and obligations.
Part five generically focuses on the part of tens and covers five chapters, that is, chapters 20 to 24. Chapter 20 is entitled “Ten things to think about before you invest”. According to Mladjenovic here, before you invest in anything, you must have a strong economic foundation, have complete understanding of the types of investments appropriate for your current situation in life and educate yourself about financial and investment matters, guides Mladjenovic.
In chapters 21 to 24, this expert beams his intellectual searchlight on concepts such as ten things to remember after you invest; ten signals of a stock price increase; ten warning signs of a stock’s decline and ten ways to protect yourself from fraud.
The concepts discussed in this book are well-researched, educative and fantastic. As regards style, one thing that works for this text is the simplicity of language. There is the use of graphical embroidery, especially cartoons, to achieve visual reinforcement of readers’ understanding and soften otherwise too much seriousness of the concepts.
However, even though the title is meant to communicate the depth of research and didactic prowess of the text, it somehow sounds derogatory. It should have been something like “Stock Investing Simplified”. Generally, this text is fantastic. It is a must-read for anybody that wants to create wealth through stock investing.
GOKE ILESANMI (FIIM, FIMC, CMC), CEO of Gokmar Communication Consulting, is an International Platinum Columnist, Professional Public Speaker, Career Mgt Coach and Certified Mgt Consultant. He is also a Book Reviewer, Biographer and Editorial Consultant.
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