Dipping your toes into the stock market for the first time can be a little intimidating if you don’t have extensive knowledge of how investments work. The good news is, you don’t need to be an investing expert to make smart decisions about where to put your money as a beginner.
1. „The Intelligent Investor,” by Benjamin Graham
Many refer to this book at the „stock market bible.” Originally published in 1949, the text focuses on developing long-term investment strategies and avoiding significant errors. Last revised and updated in 2009, it’s considered a bible of sorts for the beginning investor who’s looking for traditional wisdom about how the market works and how to make the most of it.
The book is largely focused on the concept of value investing and dollar-cost averaging, strategies that Warren Buffett has used with no small success. It’s written with the long-term investor in mind who prioritizes building wealth gradually, versus chasing down short-term wins through frequent trades.
The book provides a historical perspective on investing and a comparison with current market conditions thanks to the commentary added in the new version.
2. The Only Guide to Alternative Investments You’ll Ever Need: The Good, the Flawed, the Bad, and the Ugly
Stocks, bonds and real estate are certainly some of the most popular options for creating a portfolio as a new investor. But there are many more choices to consider as you become more experienced and confident in your investment decisions.
„The Only Guide to Alternative Investments You’ll Ever Need” explores what those choices are and how to decide which alternatives are the best fit for your investment strategy. The book looks at 20 alternatives to stocks and bonds, including private equity, precious metals, and annuities.
As the title suggests, the authors rate each group of alternatives to offer readers a guidepost on what they should (or shouldn’t) consider for their portfolios. It’s a good read for learning more about alternatives and their pros and cons overall if this is an area you’d eventually like to explore.
3. „The New Buffettology,” by Mary Buffett and David Clark
The full title of the book is „The New Buffettology: The Proven Techniques for Investing Successfully in Changing Markets That Have Made Warren Buffett the World’s Most Famous Investor,” and that captures the essence of this book.
Some investment gurus have had flashes of genius for a few years, but Buffett’s investing career success spans decades, and his wisdom is timeless.
This book will show you how he has been able to build what he has, which is to create long-term wealth in the stock market through value investing. And in case you are wondering if there is any connection between the author and the well known investor, author Mary Buffett is the former daughter-in-law of Warren Buffett.
4. The four pillars of investing
As you learn about different types of investments you also have to learn how to coordinate them in a way that reflects your risk tolerance, investment style, goals and time horizon. „The Four Pillars of Investing” offers advice on how to create the ideal asset mix for your situation.
The book takes a holistic view that looks at more than just what’s in your investment portfolio and accounts for all of the different assets you may have, including cash savings or your home. The four pillars referred to in the title are investing theory, the history of investing, investing psychology and the business of investing. That may sound complex but „The Four Pillars of Investing” proves to be highly readable.
Bernstein explains the four concepts simply and clearly, in the context of how they relate to choosing investments strategically to produce the results you want.
5. Best Beginner’s Guide to Stocks: The Little Book That Beats the Market
Are you clueless about how to choose stocks for your portfolio or what makes one stock better than another? Do you have questions about why stocks matter for investing? If you said yes, „The Little Book That Beats the Market” is a must-read.
First published in 2005 and updated in 2010, this book delves into the basics of how the stock market operates and the principles that are essential for successfully investing in individual stocks. Greenblatt also explains his simple-but-proven theory of stock market investing, which focuses on buying above-average companies at below-average prices.
The book is written with the beginner mind and it’s designed to help investors build a foundation for picking stocks that can carry them through their investing career.
It’s easy to read and understand, making it user-friendly for the new investor who wants to avoid complicated investing jargon.
6. The Bond Book: Everything Investors Need to Know About Treasuries, Municipals, GNMAs, Corporates, Zeros, Bond Funds, Money Market Funds, and More
Bonds are completely different from stocks and they can serve a very different purpose in a portfolio. Understanding how the bond market works is critical if you’re planning to add them to your investment strategy.
That’s what Annette Thau explains in „The Bond Book.” The book is geared towards both experienced investors and investors who may be wading into bonds for the first time. It covers everything you need to know to get started with bonds, including advice on buying individual bonds versus bond funds or ETFs and how specific types of bonds, such as junk or municipal bonds, compare.
Bonds can offer a fixed-income component to balance out the growth generated by stocks in a portfolio, something that becomes more important as you get older and draw closer to retirement.
„The Bond Book” is a go-to reference for bond selection and managing the risks that may accompany bond investing.
7. How to Invest in Real Estate: The Ultimate Beginner’s Guide to Getting Started
Real estate is an asset class that’s historically uncorrelated with the stock market. That means if stocks become volatile, real estate investments can offer some insulation against the ups and downs.
There are different ways to invest in real estate, including real estate investment trusts (REITs), real estate crowdfunding and direct ownership.
Specifically, the book covers different types of property investments, what kind of legal structure you need to invest in real estate as a business, how to find the best deals and how to build wealth with your property investments over the long term.
It’s the most in-depth and detailed guide produced yet on how to become a property investor.
There are numerous books that can guide you through the fundamentals of how the market works, different investing styles and what you need to know about individual securities. Deciding which ones to read first can be the tricky part because you don’t want to get overwhelmed.
Courtesy of: The Balance
