Introduction
Recent opinion polls indicate that only 55 percent of Americans invest in the stock market. However, investing your money wisely is one of the most effective ways to grow your wealth and achieve your long-term financial goals. Not sure where to start when it comes to the stock market, where to invest your money, and which stocks to choose?
Best Overall: The Intelligent Investor
Published by Benjamin Graham for the first time in 1949, his tried-and-true approach to investing has stood the test of time. Graham’s famous “value investing” theory, which seeks to maximize returns while minimizing losses and controlling emotions when making investment decisions, is one of the key highlights of this book. The updated version includes comments and notes from financial analyst Jason Zweig, which is a nice plus.
Best for Beginners: The Beginner’s Guide to the Stock Market
Author Matthew Kratter guides novice investors on how to make real money in the stock market, starting from avoiding common mistakes to knowing investment strategies that truly work and what will cost you. This book helps readers develop their investing skills by explaining simple concepts, such as where to open a brokerage account or how to buy their first stocks, to more advanced concepts, such as generating passive income or how to trade stocks.
Best in Index Fund Investing: The Little Book of Common Sense Investing
John C. Bogle, founder of the Vanguard Group, focuses his “Little Book of Common Sense Investing” on a very straightforward investment strategy: index funds. Specifically, low-cost index funds. This book details this strategy, from investing in low-cost index funds (the best being those that track an index like the S&P 500), holding them for the long term, and then reaping the rewards. Is it appealing? Not necessarily. But it is one of the investment strategies that have proven effective over time. Bogle is also the author of “Common Sense on Mutual Funds” and “Enough.”
Best for Skill Acquisition: How to Make Money in Stocks
In reality, anyone who has invested in the stock market wants to do one thing: make money. But it’s not as easy as it seems. This is where the bestselling book “How to Make Money in Stocks” by William J. O’Neil comes in. The book explains easy techniques for making money when investing, from how to choose stocks that are well-positioned for price increases to selecting the best bonds, stocks, and margin ETFs, and even the most common mistakes that lead to losses for investors. O’Neil is the founder and publisher of Investor’s Business Daily, a daily newspaper covering financial, economic, and stock market topics.
Best in Random Concepts: A Random Walk Down Wall Street
The updated version of this classic book about Wall Street helps investors understand important concepts in the stock market including ETFs, emerging market investments, derivatives, and more. Economist Burton Malkiel from Princeton focuses on the idea of the “random walk hypothesis”.
The random walk hypothesis states that it is impossible to consistently win in the markets, so it’s better to build a balanced portfolio that matches market performance. This idea also supports the efficient market hypothesis.
Key concepts in the book include technical and fundamental analysis, whether they relate to actively managed mutual funds, and other investment theories that have been tested and proven successful.
Best
Classic Choice: Common Stocks and Uncommon Profits
Philip Fisher, one of the most influential investors of all time, penned this investment book in 1958. “Common Stocks and Uncommon Profits” includes some of the author’s most valued investment strategies, particularly the so-called news inspection method, where the potential investor gathers information about a company from various sources before investing. The updated edition features an introduction by Fisher’s son, Ken Fisher, a truly successful investment professional.
Best for Long-Term Investors: Stocks for the Long Run
Editor Max Olson adds Warren Buffett’s annual letters to Berkshire Hathaway shareholders to this compilation. Buffett’s letters tell the story of how a struggling small textile company transformed into one of the largest multinational companies in the world under his leadership. In the book, you can find information on economics, investing, management, and more.
The lessons here trace the company from $18 per share in 1965 to $297,600 per share according to the 2017 letter. If you invest like Buffett, you should be on the right path to significant investment success.
Best for Day Traders: How to Trade Stocks for a Living
Learn about the stock market from the market experts themselves with the book “Market Wizards.” In this book, top traders from around the world share their secrets of success with author Jack D. Schwager. Through interviews with many “champion money-makers” in most financial markets, including Bruce Kovner, Richard Dennis, Paul Tudor Jones, and others, Schwager seeks to understand what separates these traders from unsuccessful investors. You will learn directly from the experts in this book, although the author also summarizes their answers into a set of principles that you can apply in your own trading journey. Additionally, this book is filled with tales, including a story about a trader who turned $30,000 into $80 million.
Best Research-Based: The Little Book That Still Beats the Market
Robert Shiller is a renowned and highly respected economist, so much so that he has his own index named after him. The Case-Shiller Home Price Index is based on the work of Mr. Shiller and Karl Case. A Nobel laureate who predicted the tech and housing bubbles, readers look to his text to better understand how bubbles occur.
Bubbles and market cycles are important concepts to understand, and a well-founded investment strategy can help you avoid the biggest mistakes in the boom and bust cycle. Shiller emphasizes that the volatility resulting from psychological impacts poses risks in all asset markets, including the stock market.
The updated edition of “Irrational Exuberance” provides an overview of the financial markets of stocks, real estate, and bonds so you can spot the next bubble and prepare before it bursts.
Best Personal Account: The Bogleheads’ Guide to Investing
The Bogleheads are named for their loyalty to Vanguard founder John Bogle, and they are an enthusiastic group of investors who participate in the Bogleheads investment forum, which has over 90,000 members. “The Bogleheads’ Guide to Investing” acts as a sort of extension of that, where readers of the forum share a relatively straightforward guide to investing and building wealth the Bogle way. Author Mel Lindauer is a former writer for Forbes.com and was dubbed the “Prince of Bogleheads” by John Bogle himself.
Final Judgment
Benjamin Graham’s book “The Intelligent Investor” receives the highest rating for its straightforward approach to investment principles that everyone should know, such as value investing and how it can help push your portfolio towards prosperity.
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About the Expert
Rachel Morgan Cautero holds a master’s degree in journalism from New York University and has over a decade of journalism experience, primarily in the personal finance sector. She was most recently the editor-in-chief of “Deliorth,” a finance-focused media outlet for women. Her work has been published in SmartAsset, The Balance, The Atlantic, Life & Money, Parents, WealthRocket, and Yahoo Finance. These titles were selected based on the author’s journalistic credentials, reader opinions, and any relevant awards.
Source: https://www.thebalancemoney.com/best-books-for-learning-about-stocks-4171823
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