With the amount of information available today, it can be hard for beginner investors to decide where to start.
Here I’ve gathered the all-time best books for beginner investors that will definitely help you on the right track!
The Only Investment Guide You Will Ever Need by Andrew Tobias
Tobias’s book most certainly lives up to its name.
It covers everything from actually saving your money and making a financial plan to different investment strategies and the most common concepts in investing. In other words, it teaches you how to achieve a secure financial future.
What’s worth mentioning is that unlike the other investing books mentioned here, this one also offers advice on financial planning, which makes it a great first book for novice investors.
Overall, the book is about taking responsibility for your personal finance, and how investing works. It will go as far as offering advice on how to teach your own children to invest.
The book is mostly directed to people living in the US, so if you live somewhere else, you should obviously remember that the tax and retirement-related advice won’t probably apply to you all that much.
That being said, it’s safe to say this book will help you achieve your financial goals wherever you’re from.
A Random Walk Down Wall Street by Burton G. Malkiel
Burton Malkiel is a household name as far as economists go, and it’s said that A Random Walk Down Wall Street is THE book to read when you start investing.
The main lessons in Malkiel’s book are that it’s difficult to beat the market, most of us will fail during the process, and the simpler way is to invest in low cost index funds through dollar cost averaging.
This way you beat most professional and amateur investors with little effort. As Malkiel shows, taking control of your financial life can be extremely simple.
A Random Walk Down Wall Street covers the most common concepts in the investment world like diversifying, the relationship between risk and reward, the efficiency of the stock market, and many others.
Malkiel’s book is by far one of the best investing books for beginners and financial literacy books there is. It also offers you examples on how to build an investment portfolio out of index funds without any complicated investment vehicles.
It’s the kind of book that when you read it, you can invest for the rest of your life without reading any other book about investing and achieve great stock market returns in the long term.
The Little Book That Still Beats the Market by Joel Greenblatt
What would you expect of a book written by a wildly successful hedge fund manager with a value investing approach, who brings forth a magic formula that has guaranteed results?
Honestly, I would call it a scam and move on.
But, once you actually read it, it’s probably one of the smartest books ever written on investing.
The book is understandable without any prior financial knowledge, which makes it especially suitable for young investors.
Greenblatt’s book is most famous for its magic formula that can be used to achieve higher returns.
Now, while the magic formula seems to actually work (to some extent), the real value of the book is not the formula but the common sense investing approach it teaches.
This is one of the few books that not only manages to simply explain how the stock market works, the idea behind stock picking and value investing but does it in less than 190 pages.
Thinking Fast and Slow by Daniel Kahneman
Written by Nobel prize winner psychologist and economist Daniel Kahneman, Thinking Fast and Slow is the pinnacle of behavioural economics.
In his book, Kahneman summarizes his research on how we make decisions and what affects the decisions we make. As you learn from the book, we’re not nearly as rational in making decisions as we might think we are.
For an investor, the book is full of useful information that you can use to observe your own decisions and behaviour.
Once you know why you come to a certain conclusion and what affects your thinking, you can evaluate whether your decision is truly as well thought-out as you think.
Quite ominously, it’s also known as “the book no one finishes”.
Kahneman’s masterpiece is a slow read and it does demand quite a bit of focus but is well worth it in the end!
The Essays of Warren Buffett
If there is one investor in the world who needs no introduction, it’s the most legendary of all legendary investors, Mr. Warren Buffett.
The Essays of Warren Buffett is a collection of his annual letters to Berkshire Hathaway shareholders. These letters have achieved a status that few CEOs can even dream of.
Full of priceless information and timeless lessons about topics like selecting investments, valuing businesses, and investor behaviour. In some ways, it’s like having your own financial advisor on hand that happens to be the best in the world.
What sets Buffett’s comments apart from other CEOs is that they’re brutally honest and have no corporate jargon that repels most sane human beings.
What makes Buffett’s letters a pleasure to read is the fact that he has a rare gift of expressing complex concepts in a down-to-earth way.
A definite must-read for everyone interested in value investing and investing overall.
The Intelligent Investor by Benjamin Graham
“By far the best book on investing ever written.” – Warren Buffett
Written by Benjamin Graham, who’s better known as the father of value investing. The book was first published in 1949 and has maintained its position as one of the best finance books for beginners of all time for over 70 years.
The Intelligent Investor is a sort of book that has always something new to offer and is guaranteed to improve your financial future and help you build wealth.
It covers all the topics a value investor needs, such as investing vs. speculating, the margin of safety, intrinsic value, and how to pick undervalued stocks (of course).
For beginner investors, it’s probably best to Google everything unfamiliar to you and study the concepts thoroughly.
The Intelligent Investor is one of the books greatest finance books ever written. It has helped countless people in achieving financial independence, and it will no doubt be useful to you also.
One Up on Wall Street by Peter Lynch
Written by the legendary hedge fund manager Peter Lynch in 1989, One Up on Wall Street is full of wisdom from one of the best fund managers of all time.
The book is written in a conversational style and is extremely down-to-earth, which makes it one of the best finance books for beginners and a pleasure to read. While the book is mostly about stock picking, it’s also a tremendous personal finance book.
One Up on Wall Street goes through the very basics of investing, how to categorize companies, and how to pick stocks that are most likely to succeed in the long term. What’s even better, it does so with practical advice that anyone can follow.
Lynch is a long-term investor at heart. The logic behind long-term investing is sound – if you don’t hold the winners long enough, they don’t have time to compound.
The biggest factors of successful investing, according to Lynch, are knowing what you own, holding the winners for a long time, and basing your investment decision on business fundamentals.
Lynch’s main message is that it is entirely possible to beat professional investors as an amateur. All you need is common sense, curiosity, and elementary math skills.
