Information regarding how to invest is everywhere we look. There are 24-hour finance channels, websites, books, and magazines in the thousands, and a trillion dollar industry pumping out millions of so-called “experts” via financial advisors. Most of these resources do nothing but confuse investors who are looking for straightforward, simple, and clear advice. In fact, websites like TheStreet (TheStreet Network) and media personalities such as Jim Cramer tend to make matters worse by getting in the way of long-term, sensible investing. That said, let’s focus on getting you the information you need to invest intelligently.
My investment experience dates back to 2001 when I started working at an Australian derivatives trading firm. Since then, I’ve completed industry courses, worked as an investment advisor, and published investment books and courses. I continue as a DIY investor and trade options.
While working as an investment funds advisor (sadly, I use to sell actively managed mutual funds), I discovered and read A Random Walk Down Wall Street, which drastically changed my approach to investing and recommendations to investors. Long story short, my advice, similar to Warren Buffett, is to stick with low-cost index funds with ample diversification.
A Random Walk Down Wall Street is one of many books I’ve read, and the more I read, the more I realize that new information isn’t surfacing. It’s more so a recycling of information spun a different way from author to author. As a result, if you’re looking for investment books that offer timeless advice, I highly recommend these three and no others.
Best Investment Books
A Random Walk Down Wall Street
This book changed my life. In RWDWS, you’ll learn the necessary investment terminology to navigate the terrain and about investing strategies that work. Drawing on his varied experience as an economist, financial adviser, and successful investor, Burton Malkiel shows why an individual who holds a low-cost, internationally diversified index fund is likely to beat professional money managers. Among many other accomplishments, Malkiel is the CIO at Wealthfront, a robo-advisory firm. This book is NOT a short read, so I recommend breaking it up into chunks.
The Intelligent Investor
Warren Buffett is the poster child for success in active investing, but even he’ll tell you that you’re better off investing in index funds. After all, not everyone is as a fortunate as Buffett to be born to a congressman/stockbroker father (many high ranking connections) and be taught by Benjamin Graham, the father of value investing.
The Intelligent Investor is an essential read for any investor who wants to be truly accountable and engaged in his/her investment activities. I read the updated version with Jason Zweig, a personal finance columnist, and the additional insights and commentary made the read that much more worthwhile. Funnily enough, Graham also preached index investing long before it became fashionable.
One Up On Wall Street
Let’s be honest, trading stocks are sexy and exhilarating. I’m sure many index fund enthusiasts, including myself, dabble a little in active investing and trading stocks. Nothing is wrong with allocating a portion of a portfolio to try to beat the market or for alternative strategies. However, if you’re going to attempt to beat the market over the long term, stay informed and know that most people fail (even the “professionals”).
In One Up On Wall Street, Lynch offers easy-to-follow advice for sorting out the long shots from the poor bets. He provides guidelines for investing in cyclical, turnaround, and fast-growing companies. A must-read for active investors and traders.
After reading these three books, I’m sure you’ll be a lot closer to making the most of your investing activities and returns. Happy investing!