Like I’ve always said before, your mind is the most important asset you own. If you focus on your investing education instead of the immediate results, you will see much bigger gains over your lifetime.
Investing in resources like these top investing books will be the best investing decision you will make in your life. From all the investing books I’ve read, here are my top 8 for someone just getting started in the market.
Bottom 2 of the Top Investing Books
8. Common Stocks and Uncommon Profits and Other Writings by Philip Fisher
This investing classic is a pillar of growth investing strategies. I agree with Fisher’s philosophy of only needing a few well selected companies to see spectacular profits. Fisher’s insight is unique as he goes beyond the numbers, bringing to light the importance of management and R&D.
The recommendation to investigate about companies through talking to employees and competitors is rare and valuable wisdom. I don’t think this book should be considered as a sole resource for an investing strategy, but instead supplemental reading to complement other knowledge.
7. A Random Walk Down Wall Street by Burton G. Malkiel
This is another great book to get different perspectives on investing. Malkiel does a great job at presenting all the different strategies for investing in the stock market, from value investing to growth investing, and indexing. While I don’t agree with the final stance of the author, I still believe that A Random Walk Down Wall Street was valuable towards making me aware of other strategies that people use on Wall Street.
Middle 3 of the Top Investing Books
6. Rich Dad Poor Dad by Robert Kiyosaki
This was the book that started it all for me in my investing journey, and I’d recommend to any other absolute beginners. This book is so inspiring and motivating, and Kiyosaki does a good job of giving the reader a different way to look at money.
While I don’t agree with his ideas of using other people’s money to invest and make more money, there are still timeless ideas and quotes throughout the book. Rich Dad, Poor Dad gives you the “why” of investing, and gets you started on the right mindset to becoming wealthy.
5. What Works on Wall Street by James O’Shaughnessy
This book gives you specific methods to analyze individual stocks and companies. Through extensive research and testing, O’Shaughnessy showed how superior gains can be made and have been made by value investors in the stock market. The amount of sheer data in What Works on Wall Street is fascinating, and the book took Wall Street by storm as a best seller in the 90’s.
O’Shaughnessy also defends the importance of the rarely used P/S ratio, and of course backs it up with more raw data and case studies. If you are a numbers guy like I am and love to see how ratios and indicators have shaped the performance of stocks, pick up this book today.
4. Winning on Wall Street by Martin Zweig
This book is more on the advanced side, because I believe you need to learn individual stock analysis before you can fully appreciate the insight from Zweig in this bestseller. I don’t agree with his method of picking stocks, yet his research on monetary policy and the Fed’s impact on the stock market was very insightful.
Starting on Chapter 4, Zweig shares the great indicators he has discovered from a lifetime of experience. As I read this book, ideas flowed into my thoughts and exhilarated my mind as I learned from a great market observer and practitioner. While Zweig has since passed away, his legend will continue on through the excellence of this book.
The 3 Top Investing Books
3. The Richest Man in Babylon by George S. Clason
This book is an investing classic. A very quick read, entertaining, and informative. The book gives you exactly the right mindset you need to be a successful investor. You can be the best stock picker in the world, but if you don’t learn the lessons presented in this book you will never be wealthy.
The lessons from this book are always relevant, as you’ll quickly realize there is no secret to wealth. The same way people have been getting wealthy during the Babylon times is the same way people get rich today. The Richest Man in Babylon teaches important lessons while keeping the reader entertained with timeless stories.
I hope you don’t take this recommendation lightly. As an investor, you need this book like a tour guide needs a map. At its low price, you have no excuse.
2. Beating the Street by Peter Lynch
I’ve also recommended this book for beginners in my post on Where to Start. This book follows the life of the wildly successful investing career of hedge fund manager Peter Lynch. Each story peaked my interest as a reader and made Beating the Street a classic page turner. Lynch has an easy to follow writing style and investing style, which has made this book wildly successful as well.
His strategy, based on growth investing and P/E ratios, is the perfect place to start for beginners wanting to analyze individual stocks. This book is a fantastic prelude for the to The Intelligent Investor, which I talk about below. If you are tired of investing information overload, I stress reading this book then The Intelligent Investor. You’ll be so glad you did.
1. The Intelligent Investor by Benjamin Graham
Ben Graham is well known as the father of value investing, and rightly so. The man was Warren Buffet’s mentor, and his analysis of individual stocks has been followed and respected for decades. His strategy is one of the few that has stood the test of time. Graham understood stocks better than anyone else has, and was able to concisely explain himself in this book.
The beauty of the value investing approach presented in the book is that an investor learns how to properly value a company, and identify stocks that are undervalued. Once that is recognized, Graham teaches how to ensure that the undervalued company is in outstanding financial condition. Combining these two factors gives investors a margin of safety, which limits the downside of an investment and often leads to above average returns.
Through his teachings, Graham humbly stresses the importance of limiting risk and winning with patience and long term thinking. The wisdom Graham shares is unparalleled in the investing world, and continues to help investors secure the financial freedom they’ve always desired. Warren Buffett calls this book the “by far the best book on investing ever written,” and rightly so.
Reading this book will equip you with all the tools and knowledge you need to invest in individual stocks successfully and profitably. After I read the Intelligent Investor, I felt as though “I was blind but now I see.” This book is the ultimate guide to investing– and if you get only one book from this list– make it this one.
Best Supplement to The Intelligent Investor
Value Trap Indicator by Andrew Sather
While The Intelligent Investor is undoubtedly the most useful and comprehensive guide for investors, Value Trap Indicator fills in the gaps and crafts a value investing approach for the modern age.
Although the principles of sound investing remain unchanged, recent bankruptcies of the last several decades have emphasized the importance of a sound balance sheet and strong profitability. Value Trap Indicator examined all of the financial data from these bankruptcies and constructed a number-based system to prevent future value traps.
The best way to improve investing performance is by limiting draw-downs and losses. The best way to do this is to become an expert at value traps. By reading this book, you’ll have value traps handled, and will have all the best tools to conquer Wall Street.