Information regarding how to invest is everywhere we look. There are thousands of websites, books, and magazines covering investment and personal finance topics. 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.
My investment experience dates back to 2001 when I worked at a derivatives trading firm. Since then, I’ve completed many investment courses and have worked as an investment advisor. Also, I’ve published investment books and courses.
While working as a mutual fund broker (sadly, I use to sell actively managed mutual funds), I 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 such as those offered by Vanguard, BlackRock, and State Street.
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 data points spun in different ways from author to author. Therefore, if you’re looking for investment books that offer timeless and essential advice, I highly recommend these three and no others.
Best Investing Books
A Random Walk Down Wall Street
In RWDWS, you’ll learn about investment strategies and asset allocation models that work. Drawing on his varied experiences as an economist, financial advisor, and successful investor, Burton Malkiel shows why an individual who holds a portfolio of low-cost index funds is likely to beat professional money managers. Among many other accomplishments, Malkiel is the chief investment officer (CIO) of Wealthfront, a robo-advisory firm. A RWDWS is NOT a short read, so I recommend reading it in chunks.
The Intelligent Investor
Warren Buffett is a poster child for active management and value investing, but even he’ll tell you that you’re better off investing in index funds. Buffett was extremely fortunate to learn about investing from Benjamin Graham, the author of The Intelligent Investor and “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 experience more worthwhile. Funnily enough, Graham advocated for index investing long before it became fashionable.
One Up On Wall Street
Let’s be honest, trading stocks is sexy and exhilarating. I’m sure many passive investing enthusiasts, including myself, dabble a little in active management and trading securities. Nothing is wrong with allocating a portion of a portfolio to try to beat the market. 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. It’s 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. Also, consider that there are several ways to invest in stock and bonds as per my video below.