A lot of people have written about the best investing books or the best books about money, but what about books for the beginning investor? I wanted to put together my list of favorite books to get started investing.
These books are designed for the beginner, but still have a lot of solid topics that any level investor can use. Here is my take on the five best investing books to get started investing!
1. Millionaire Teacher by Andrew Hallam
I’ve talked about Millionaire Teacher several times here on The College Investor, and even did an interview with Andrew Hallam (which you can read here). Well, the reason I’ve done that is because this book is one of my favorites for new investors looking to get started investing. It teaches basic strategies that anyone can apply – the premise that a teach becomes a millionaire should highlight that.
The other great aspect of this book, however, is that it is very easy to read and is deigned for the novice. It skips a lot of technical fluff and focuses on what you need to know, when you need to know it. Andrew Hallam does a great job explaining the basics, and then moving into more complicated topics.
2. A Random Walk Down Wall Street by Burton Malkiel
A Random Walk Down Wall Street was one of the first investment books I ever mentioned on The College Investor. It is still one of my favorites, especially for beginning investors. The premise of the book is that a “random walk” will yield the same results as a seasoned trader over time. Or, in a better example, a monkey could do the same as you!
However, beyond the hyperbole, the book makes a lot of solid arguments around index funds, diversification, and portfolio allocation theories. For a beginner getting into the stock market, this is an excellent educational tool on how you should craft your investment portfolio to be able to keep up with the total market over time. This book was also written for financial novices, so you don’t need to be worried about being overwhelmed by technical jargon you won’t understand.
3. Common Stocks and Uncommon Profits by Philip Fischer
There is more to investing in the stock market than just value investing, and that is where Philip Fischer comes into play. In Common Stocks and Uncommon Profits, Fischer extols on the tenants of growth investing. However, beyond the focus on growth, this book really shines in highlighting Fischer’s 15 Points of Investing, which all investors can benefit from.
Warren Buffett once said that he was 85% Graham and 15% Fischer. The reason for this statement is, that while Buffett really looks at the fundamentals of a company like Graham discusses in-depth, he also leverages Scuttlebutt and like wide moats like Fischer discusses.
Adding this book to your investment collection will give you a different, but valuable, perpective.
4. The Interpretation of Financial Statements by Benjamin Graham
If you’re going to get started investing in individual stocks, it is essential that you understand them. That is where The Interpretation of Financial Statements by Benjamin Graham comes into play. Reading this book is step one in truly understanding how to invest in individual companies.
If you’re looking to move beyond the mutual fund and ETF and into individual stock holdings, you have to fully understand what you’re getting into. Benjamin Graham goes into extreme detail on how to analyze financial statements of companies, and it is a must-have for any fundamental investor. Consider this book if you’re looking to move beyond the annual reports and proxy votes and into some serious statement analysis.
5. The Intelligent Investor by Benjamin Graham
The Intelligent Investor is a little more meaty than most of the books on the list, and it is by far the most technical. That’s why I placed it at #5 on my list. However, after you’ve gone through the first few books, this one really takes it to the next level, especially when it comes to finding and evaluating individual companies to invest in. Since Benjamin Graham is known as the father of value investing, it should come as no surprise that this book focuses on key value investing strategies that all investors can apply.
If you want to get a book that is full of solid investing insight, especially when it comes to evaluating and identifying individual companies to invest in, The Intelligent Investor is a great place to start. But be warned – it is long, and it can be very technical at times. If you can get through that, though, it is a very solid read.
What other books do you recommend for getting started investing?