Investing is, for sure, a hell of a task which may cause you to lose almost everything, but it’s also true that you will gain big if you get everything right. Perhaps this is the reason why people all over the world “play their luck” with the stock and securities market.
Why not reduce the chances of getting into losses by studying, analyzing the stock, and calculating the risk associated with it. Although now we have access to the internet, which is, by the way, a great source of research, books provide us with something that even a world wide web can’t.
Without knowing what you are looking for, how can you maximize your profit? To help you with your investment plans and increase your knowledge about stock market investments, we have gathered some of the best investing books that you can find.
17. The Book On Rental Property Investing: Best For Real Estate Investing
Author: Brandon Turner
Brandon Turner is a real estate investor and founder of Open Door Capital LLC, a real estate investment firm that allows clients to invest in mobile home parks for risk-adjusted returns. He also serves as the vice president (creative) at BiggerPockets.com, one of the largest online real estate investing communities.
In his award-winning work, “The Book on Rental Property Investing,” Turner put forward some of the most efficient strategies and practices employed by property investors around the globe. It could be your handy guide on how to find lucrative deals in competitive markets and valid ways to finance them.
The book also does a good job explaining why most real estate investors fail and how you can prevent yourself from being in that situation.
16. Options, Futures, and Other Derivatives: Best For Derivatives and Options Trading
Author: John C. Hull
For investors who trade in derivatives such as options and futures, John Hull’s book on Options, Futures, And Other Derivatives (OF&OD) is nothing less than a holy grail. Universally known simply as “Hull,” the book serves as an excellent starting point in the derivatives industry. And according to many, it’s a must-have book for every investor and finance professional.
OF&OD is written in a clear and easy-to-understand language and is mostly thorough. It covers essential topics such as how commodity derivatives are valued, the credit crisis, overnight indexed swap, and the Black-Scholes-Merton formula. With help of this book, John Hull does a great job offering a unique perspective of the modern derivate industry to readers.
15. When Genius Failed: Best For Understanding Risk
Author: Roger Lowenstein
“When Genius Failed” encapsulates what went down at the Long-Term Capital Management (LCTM), a hotshot hedge fund in the late 1990s, from its meteoric rise to sudden downfall.
LTCM was founded by John Meriwether, former head of bond trading at Solomon Brothers, alongside two Nobel Prize-winning economists Robert Merton and Myron Scholes, in 1994. Also aboard was a handful of MIT doctorates who previously served at reputable positions.
The star-studded management of LTCM convinced many industry experts and pundits of its eminent success as a major player in the industry. However, after just three years of explosive growth (43 percent annual return in its second year), the fund went bust due to a combination of high leverage and exposure to financial crises in Asia between 1997 and 1998.
With the help of interviews from key members of the firm and dozens of internal memos, Roger Lowenstein’s book carefully dissects what went wrong at LCTM. It shows how greed and arrogance can lead a firm to lose billions within a period of a few months.
14. Trade Your Way to the Financial Freedom: Best For Trading
Authors: Van K. Tharp
Although the terms ‘investing’ and ‘trading’ are used interchangeably, they are two completely different methods. Investors place their bets on the share market for long periods, whereas traders focus on short-term buying and selling of stocks.
“Trade Your Way To Financial Freedom” is for those who have picked up a serious interest in trading. The book feature a number of ideas, references, and methods regarding trading. It also introduce author’s multiple-step trading model that focuses on the psychological part of stock trading, including how to create your own investment system.
13. Millionaire Teacher: Memoir
Author: Andrew Hallam
“Millionaire Teacher” tells us how, with low-cost index funds and value investing philosophy, the author, Andrew Hallam created a portfolio worth a million dollars as a school teacher. The book justify why the stock market crashes are actually healthy for your portfolio (buy the dip) and how by spending just a small amount of your time in the market, you can still be on par with most of the professionals out there.
12. Principles: Life And Work: Best Inspiration
Author: Ray Dalio
Books are a great source of inspiration, and as a young and aspiring investor, it’s vital to choose the right book to do so. As far as inspirational books on investing goes you can’t possibly go wrong with Ray Dalio’s Principles: Life And Work.
Ray Dalio is the founder and co-chairman of Bridgewater Associates, the world’s largest hedge fund with over $140 billion assets under management. He is widely considered as one of the world’s most successful investors.
The book summarizes the important skills and life lessons that Dalio obtained during his extraordinary investment career. It outlines efficient ways in which individuals (and companies) can tackle issues and make decisions. He also took the liberty to discuss the tools and practices that are being employed by his firm. These practices are based on the ideology of ‘radical truth’ and ‘radical transparency’.
11. You Can Be a Stock Market Genius: For Reference
Author: Joel Greenblatt
Learning investment strategies from a hedge fund manager could be risky, but they also provide a unique outlook on equity markets and portfolio management. Joel Greenblatt is not your average (former) hedge fund manager, however.
Greenblatt started his investing career in 1985 by founding Gotham Capital around the principles of value investing. For years, his firm beat the market with over 50 percent annualized returns.
So what investment tools and strategies he used that led to his success? You can find it all inside “You Can Be A Stock Market Genius.”
In essence, the book tells us though value investing is the way to go, investors can find undervalued stocks under certain special instances across different industries and sectors. These instances include corporate spin-offs, restructurings, recapitalizations, post-bankruptcy, merger securities, and call options.
10. The Four Pillars of Investing
Author: William J. Bernstein
William Bernstein is an American neurologist who is also known for his work in the Modern Portfolio Theory. His book ‘The Four Pillars of Investing‘ is exceptionally useful to someone who wants to start managing their own investment portfolios.
Instead of giving investment advice for making a quick buck, this book offers its readers a unique view of market theory – how the market actually works, the history of markets, and the psychological aspects of the market. The four pillars of investing, according to William Bernstein are; investment theory, history, psychology and investment business.
9. The Little Book of Common Sense Investing: Best For Index Fund Investing
Author: John Clifton Bogle
What is the simplest and most efficient investment strategy that you can use to have guaranteed stock market returns? According to John C. Bogle, the founder of Vanguard Group, the answer is low-cost index funds that holds nation’s largest publicly traded companies.
As a novice investor, to find out how you can incorporate index funds into your existing portfolio and utilize them to generate steady returns, no one is better suited than John Bogle.
His book, “The Little Book of Common Sense Investing” is enriched with in-depth analysis and advice, which will guide you on how to include the same investment strategy that Mr. Bogle has relied upon for decades.
8. Common Stocks and Uncommon Profits: Classic
Author: Philip A. Fisher
If you ask an investment professional or an industry veteran about the best investing books, a few books are likely to pop out of their mind first and Philip Fisher’s Common Stocks is one of them.
Philip Fisher’s investment philosophies are not only universally studied but are also widely applied by bankers and financiers all over the world. Though originally written more than half a century ago, his book “Common Stock and Uncommon Profits” is highly valued in the modern investment industry.
If your goal is to invest in potentially great companies with excellent management, then this book is for you. In other words, this book will help you identify the future blue-chip stocks that are currently small.
7. Security Analysis: Best Classic
Authors: Benjamin Graham, David L. Dodd, and Charles Tatham
Though Benjamin Graham’s Security Analysis was first published in 1934, it remains relevant even in today’s market. The book was co-authored by David Dodd and is currently in its sixth edition.
The two authors, who not only survived the Great Depression but the fragile politics of the World wars, urges investors to carefully determine the rough value of business before investing. Analysis of balance sheets is the first and foremost method to achieve success in the stock market. The book presents readers with other investment techniques and strategies that individuals can employ.
Several important financial terms that are in use today first appeared in this book. One such term is Margin of Safety, the difference between intrinsic value and market price of a stock.
“Security Analysis” is not your flamboyant investing book with flashy language. Instead, it is a text-book styled comprehensive outlook on the stock market and investing, which may feel dry and hard to read at times. But a foreword by Warren Buffett and commentaries by several industry veterans alone makes it a must-read by any aspiring investor.
6. The Elements of Investing: For Beginners
Authors: Burton G. Malkiel and Charles D. Ellis
Perhaps two of the all time best selling finance authors, Burton Malkiel and Charles Ellis, teamed up to produce another masterpiece, “The Elements of Investing.” The book is solely focused on feeding average investors with simple yet powerful ideas to achieve success in the market.
The book shows how, as an investor, you can tackle two of your biggest enemies; fear and greed. A disciplined approach and conviction are necessary to succeed.
5. Long & The Short of It: For Amateur Investors
Author: John Kay
“Long & The Short Of It” is a perfect book for people who are almost entirely new to the finance and investment field and looking for an expert’s guidance. (Not to confuse it with Les Binet and Peter Field’s book on marketing with an identical name).
John Kay is an esteemed economist who served as the first dean of Oxford’s Said Business School and was the former chairman of the London School of Economics. He has worked extensively on UK’s equity market.
Kay’s “Long & The Short Of It” explains how you can create and manage your portfolio. It emphasizes a long-term investment approach, diversification, and making your own financial decisions. This book can be used as a practical guide by new investors as it covers the basic technical aspects of investing.
4. A Random Walk Down Wall Street: Best For Beginners
Author: Burton Malkiel
Burton Malkiel is a noted economist who spent nearly three decades as a Director of the Vanguard Group, one of the world’s largest investment management firms. He currently serves as the Chief Investment Officer at automated investment platform Wealthfront Inc.
Over the years, Malkiel has written several influential articles and books on finance, and “A Random Walk Down Wall Street” is among them. The book summarizes Malkiel’s take on stocks, bonds, real estate investment trusts, as well as various tangible assets, such as gold. It also does an excellent job describing (active) investing techniques and methods used by professionals. As of 2020, more than 1.5 million copies of the book were sold worldwide.
“A Random Walk Down Wall Street” is often cited by proponents of the efficient-market hypothesis that states asset prices are derived by all the publicly available information. It’s perhaps one of the top investing books you can have.
3. The Essays of Warren Buffett: Lessons For Corporate America
Author: Warren Buffett
“The Essays of Warren Buffett” is a collection of hand-picked ideas and insights from the annual report letters by Warren Buffett to the shareholders of Berkshire Hathaway. As the world’s largest financial services company by revenue and one of the largest publicly traded corporations, you can only imagine how crucial these reports are.
To facilitate investors and readers with effortless access to the most critical bits or sections of these annual letters, Lawrence Cunningham, an American author (who is considered an expert on Buffett) selected and arranged them in a systematic order.
Apart from an overview of Berkshire Hathaway’s policies and future, the book contains deep insights on corporate finance/governance, common stock alternatives, mergers & acquisitions, and valuations.
2. One Up On Wall Street: Best For Beginners And Inspiration
Author: Peter Lynch and John Rothchild
Who Should Read It: Novice investors
For a young investor, what could be better than learning the art of investing from a legendary money manager himself? Peter Lynch, the co-author of “One Up On Wall Street” is one of the most prolific investors in the history of investment banking.
He served as a top manager at Fidelity Investment for more than a decade, between 1977 and 1990. Under his tenure, the Magellan Fund grew from just $18 million AUM (asset under management) to $14 billion. More importantly, the fund averaged a record setting 29.2 percent annual return during that span outperforming S&P 500 index on most occasions.
One Up On Wall Street outline Lynch’s own investment ideas and strategies that are mostly inspired by value investing philosophy. It also give readers insights on stock classification and how to streamline a portfolio among other things.
Peter Lynch, through this book, introduced the phrase “ten bagger” referring to investments that have grown ten times their initial value.
1. The Intelligent Investor: Best Overall
Author: Benjamin Graham
No list of best investing books is complete without legendary “The Intelligent Investor.” Benjamin Graham is considered the most influential investing thinker of modern times. His investment principles are followed by some of the world’s most renowned investors, including Warren Buffett and Seth Klarman.
Graham has written multiple books on investment during his entire career, but none is more popular and prevalent than “The Intelligent Investor.” Though the book was first published in 1949, multiple revisions throughout the years (the most recent in 2003, including Jason Zweig’s commentary) ensure that the contents of the book remain relevant.
Warren Buffet calls it “the best book about investing ever written,” what else do you need?