Stock Investing For Dummies®, 4th Edition

Published by
John Wiley & Sons, Inc.
111 River St.
Hoboken, NJ 07030-5774
www.wiley.com

Copyright © 2013 by John Wiley & Sons, Inc., Hoboken, New Jersey

Published simultaneously in Canada

No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, scanning or otherwise, except as permitted under Sections 107 or 108 of the 1976 United States Copyright Act, without the prior written permission of the Publisher. Requests to the Publisher for permission should be addressed to the Permissions Department, John Wiley & Sons, Inc., 111 River Street, Hoboken, NJ 07030, (201) 748-6011, fax (201) 748-6008, or online at http://www.wiley.com/go/permissions.

Trademarks: Wiley, the Wiley logo, For Dummies, the Dummies Man logo, A Reference for the Rest of Us!, The Dummies Way, Dummies Daily, The Fun and Easy Way, Dummies.com, Making Everything Easier, and related trade dress are trademarks or registered trademarks of John Wiley & Sons, Inc., and/or its affiliates in the United States and other countries, and may not be used without written permission. All other trademarks are the property of their respective owners. John Wiley & Sons, Inc., is not associated with any product or vendor mentioned in this book.

Limit of Liability/Disclaimer of Warranty: The publisher and the author make no representations or warranties with respect to the accuracy or completeness of the contents of this work and specifically disclaim all warranties, including without limitation warranties of fitness for a particular purpose. No warranty may be created or extended by sales or promotional materials. The advice and strategies contained herein may not be suitable for every situation. This work is sold with the understanding that the publisher is not engaged in rendering legal, accounting, or other professional services. If professional assistance is required, the services of a competent professional person should be sought. Neither the publisher nor the author shall be liable for damages arising herefrom. The fact that an organization or Website is referred to in this work as a citation and/or a potential source of further information does not mean that the author or the publisher endorses the information the organization or Website may provide or recommendations it may make. Further, readers should be aware that Internet Websites listed in this work may have changed or disappeared between when this work was written and when it is read.

For general information on our other products and services, please contact our Customer Care Department within the U.S. at 877-762-2974, outside the U.S. at 317-572-3993, or fax 317-572-4002.

For technical support, please visit www.wiley.com/techsupport.

Wiley publishes in a variety of print and electronic formats and by print-on-demand. Some material included with standard print versions of this book may not be included in e-books or in print-on-demand. If this book refers to media such as a CD or DVD that is not included in the version you purchased, you may download this material at http://booksupport.wiley.com. For more information about Wiley products, visit www.wiley.com.

Library of Congress Control Number: 2012955718

ISBN 978-1-118-37678-2 (pbk); ISBN 978-1-118-46119-8 (ebk); ISBN 978-1-118-46120-4 (ebk); ISBN 978-1-118-46121-1 (ebk)

Manufactured in the United States of America

10 9 8 7 6 5 4 3 2 1

About the Author

Paul Mladjenovic is a certified financial planner practitioner, writer, and public speaker. His businesses, PM Financial Services and ProsperityNetwork.net, have helped people with financial and business concerns since 1981. In 1985 he achieved his Certified Financial Planner (CFP) designation. Since 1983, Paul has taught thousands of investors through popular national seminars such as “The $50 Wealth-Builder” and other financial seminars. Paul has been quoted or referenced by many media outlets, including Bloomberg, MarketWatch, Comcast, CNBC, and a variety of financial and business publications and websites. As an author, he has written the books The Unofficial Guide to Picking Stocks (Wiley) and Zero-Cost Marketing (ProsperityNetwork.net). In 2002, the first edition of Stock Investing For Dummies was ranked in the top 10 out of 300 books reviewed by Barron’s. In recent years, Paul accurately forecasted many economic events, including the rise of gold, the decline of the U.S. dollar, and the housing crisis. He edits the financial e-zine Prosperity Alert, available free at www.ProsperityNetwork.net. Paul’s personal website can be found at www.RavingCapitalist.com, and you can view his video commentaries at www.youtube.com/paulmlad.

Dedication

For my fantastic wife Fran, my wonderful boys Adam and Joshua, and a loving, supportive family; I thank God for you.

I also dedicate this book to the millions of investors who deserve more knowledge and information to achieve lasting prosperity.

Author’s Acknowledgments

First and foremost, I offer my appreciation and gratitude to the wonderful people at Wiley. It has been a pleasure to work with such a top-notch organization that works so hard to create products that offer readers tremendous value and information. I wish all of you continued success! Wiley has some notables whom I want to single out.

The first person is Georgette Beatty (my project editor). She has guided me from day one (for both the 3rd edition and this 4th edition). Her patience, professionalism, and guidance have kept me sane and productive. Thanks for being great!

Christy Pingleton (my copy editor) is a pro who took my bundle of words and turned them into worthy messages, and I thank her. Wiley is lucky to have her!

The technical editor, Kevin Kennedy, is a great financial pro whom I appreciate. He made sure that my logic is sound and my facts are straight. I wish him continued success.

My gratitude again goes out to my fantastic acquisitions editor, Stacy Kennedy, for making this 4th edition happen. For Dummies books don’t magically appear at the bookstore; they happen because of the foresight and efforts of people like Stacy. Wiley is fortunate to have her (and the others also mentioned)!

Fran, Lipa Zyenska, I appreciate your great support during the writing and updating of this book. It’s not always easy dealing with the world, but with you by my side, I know that God has indeed blessed me. Te amo!

Lastly, I want to acknowledge you, the reader. Over the years, you’ve made the For Dummies books what they are today. Your devotion to these wonderful books helped build a foundation that played a big part in the creation of this book and many more yet to come. Thank you!

Publisher’s Acknowledgments

We’re proud of this book; please send us your comments at http://dummies.custhelp.com. For other comments, please contact our Customer Care Department within the U.S. at 877-762-2974, outside the U.S. at 317-572-3993, or fax 317-572-4002.

Some of the people who helped bring this book to market include the following:

Acquisitions, Editorial, and Vertical Websites

Senior Project Editor: Georgette Beatty

(Previous Edition: Georgette Beatty)

Acquisitions Editor: Stacy Kennedy

Copy Editor: Christine Pingleton

(Previous Edition: Todd Lothery)

Assistant Editor: David Lutton

Editorial Program Coordinator: Joe Niesen

Technical Editor: Kevin L. Kennedy

Editorial Manager: Michelle Hacker

Editorial Assistant: Alexa Koschier

Cover Photo: © Harald Sund / Getty Images

Cartoons: Rich Tennant (www.the5thwave.com)

Composition Services

Senior Project Coordinator: Kristie Rees

Layout and Graphics: Joyce Haughey

Proofreaders: Jessica Kramer, Toni Settle

Indexer: Potomac Indexing, LLC

Publishing and Editorial for Consumer Dummies

Kathleen Nebenhaus, Vice President and Executive Publisher

David Palmer, Associate Publisher

Kristin Ferguson-Wagstaffe, Product Development Director

Publishing for Technology Dummies

Andy Cummings, Vice President and Publisher

Composition Services

Debbie Stailey, Director of Composition Services