A common explanation behind this phenomenon is investors' tendencies to sell stocks prior to year-end so they can claim capital lo...
The market is flooded with lots of books on investing, which makes selection quite complicated. That’s why we decided to go the extra mile and completed the list of top 6 must-read investing manuals for you.
Gaining insight into markets, investing and the happenings in the business world, in general, does not come cheap. There is a price attached to such vital information. The most common and cheapest means of achieving this is through books. Books will let you go deep and long into the above-mentioned subjects. But there is a slight problem. The market is flooded with lots of books, thereby making selection quite complicated. So, the question remains which books are the most recommended?
Thanks to adequate reviews and insights, a best-in-business books list now exists. We have, however, gone a step further to simplify things even more. From the list, we have been able to group the books into three subcategories, namely Investing, Wall Street, and general business.
Let’s take a look at the first group – investing – and explore the top 6 books on the topic.
1. “One Up on Wall Street” by Peter Lynch, 1989
This is our favorite. Digesting the content of this book gives a different perspective about markets, investing, and even writing business literature. Who is Peter Lynch, you might ask? Lynch was the fund manager at Fidelity Magellan. His approach to business and investing made him a legend in the business space. He was all about buying what you know, a belief he practiced time and again.
For instance, he saw how busy the Dunkin’ Donuts stores were and came to the conclusion that an investment in the business would be profitable in the long run. So, he bought its stock. He is the originator of the phrases “two-bagger” and “three-bagger,” which simply talks about a stock that doubles and triples.
All in all, the book makes for an easy read and is furnished with anecdotes. This is one book every investment-conscious person should read. Learn from a grandmaster investor.
(Also check out, “Beating The Street” and “Learn To Earn.”)
2. “The Intelligent Investor” by Ben Graham, 1949
This is a must-have book for every individual who wishes to make profitable investments. It is a book for the serious investor. It is written by Ben Graham, the legendary Columbia finance professor who also taught and mentored Warren Buffett.
Published over 70 years ago, this timeless masterpiece remains relevant to date. One interesting subject he touched in his book is psychological mistakes, a topic that still makes sense in today’s world.
( You can also look up “Security Analysis” by Graham and David Dodd, 1934)
3. “The Millionaire Next Door” by Tom Stanley, 1996
This is a book specifically written for those who want to hit it big financially in America. How to achieve this? Cut down on spending on irrelevant things! Unfortunately, these irrelevant things make up a big portion of our daily expenses. Do not buy NFL tickets. If you must watch live games, then go to your local college games or even your kids’ games. This will save you quite a good sum in the long run.
If you are wondering what business you can start to get rich in America, then consider starting a dry-cleaning establishment or a chain of liquor stores. Where does all the money in the family go? To those with one type of problem or another, like addicts, who require the help of rehab centers to live normal lives. This should be guarded against.
(See also“The Millionaire Mind,” 2000.)
4. “The Essays Of Warren Buffett: Lessons For Corporate America” by Warren Buffett and Lawrence Cunningham, 2001
Our list cannot be considered complete if the wisdom of the Oracle of Omaha does not find a way into it. The words in this book are from Warren Buffett himself, the greatest investor of our time. It will be a disservice to oneself to pass up on this great book. The contents of this book are letters written by Buffett to shareholders. As you can imagine, the letters have come to be the standard for investment thinking.
5. “Common Sense on Mutual Funds” by John Bogle, 1999
This book is considered by many to be a financial revolutionary masterpiece. In it, Jack Bogle, the founder of the Vanguard Group, explained in simple yet powerful terms of how active investing is a losing game.
In case you don’t know what active investing is, it is simply the selection of stocks and/or hiring someone to do it (check out our full beginner’s guide into investing for more info). He went ahead to proffer a solution, which is mutual funds. According to him, making investments in a low-cost, broadly diversified mutual fund is a sure winning strategy. Like investing in the Vanguard 500 Index fund, for instance. Whether his assertions were right or wrong was left to investors to decide. As it turned out, investors voted him right, with their wallets.
Today, Vanguard’s assets under management are worth $4 trillion. If you are thinking Bogle is super-wealthy as a result of the massive investments, think again. Going by Wall Street standards, he isn’t wealthy enough. The primary reason is that Vanguard isn’t owned by one man, rather by its investors.
Furthermore, Warren Buffett was so impressed by Bogle that he referred to him as “a hero” to investors. That said, if you are a fan of brutal honesty, then this book is for you. (Also read “The Little Book of Common Sense Investing, 2007
6. “A Random Walk Down Wall Street” By Burton Malkiel, 1973
Burton Malkiel released his book titled “A Random Walk Down Wall Street” in 1973, in which he argued that low-cost index funds are the best form of investment for everyone. But as at then, there were no Low-cost index funds.
The book’s 11th edition happens to be more insightful. It will guide both the beginner and expert investors on how to grow their low-cost index funds portfolio. Long before passive investing became a thing, Malcolm was already its advocate. It was like he saw the present financial industry back in the ’70s.
Malkiel’s book is all about broad diversification, reinvesting, rebalancing your dividends, as well as familiarizing yourself with the relevant tax laws and how to use them to your advantage.