The 9 Best Stock Market Books of 2020
Improve your stock market investing skills
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The stock market sits at the beating heart of the American economy. Fortunes are made and lost every day as shares of stock trade on The New York Stock Exchange, NASDAQ, and other markets. Some of the most successful investors ever are known for their love of reading, and for good reason. You can learn a lot about the fundamentals of the stock market from books and use that knowledge to build the right investing strategy for your unique goals and needs.
To help you get a leg up on the volatile industry, we compiled a list of the best books that will give you insights into your stock market investments and beyond as you learn how stocks work, how to avoid the biggest risks, and how to build a growing portfolio with your own investment dollars. These books belong on every investor’s bookshelf. Whether you are new to investing or a longtime veteran, any of these reads can boost your investing IQ and help you reach your long-term investment goals.
Best Overall: The Intelligent Investor
If you're only going to read one book about stocks, "The Intelligent Investor" is the book to go with. Originally released in 1949 by Benjamin Graham, Warren Buffett’s college professor, this title remains the single best book on investing to ever hit the shelves.
While the book is a bit dense, its concepts help investors follow Graham’s popular “value investing” philosophy. The idea is to find long-term strategies that keep your portfolio safe and solid while others are busy trading and taking big risks. Finding these successful investments requires evaluating the company’s fundamentals, or financial performance, over market swings. Through the rises and falls of the stock market over the last 70 years, this book has held up as the go-to resource for investors looking for long-term investment success.
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Best for Beginners: A Beginner's Guide to the Stock Market
As the title suggests, "A Beginner's Guide to the Stock Market: Everything You Need to Start Making Money Today" gives you everything you need to know if you're new to stock marketing investing. Author and retired hedge fund manager Matthew R. Kratter will walk you through up-to-date, basic lessons, like the best place to open up a brokerage account, how to buy your first stock, how to trade momentum stocks, and more. He'll also share mistakes that beginner investors make, so you'll need to pick up a copy before trading or buying your first stocks. With over 20 years of insights packed in the book, you'll learn how the stock market works, so you can start making money right away.
Best on Index Funds: The Little Book of Common Sense Investing
The updated 10th-anniversary edition of "The Little Book of Common Sense Investing" came out in 2017, and it’s another that belongs on the bookshelves of both professional and armchair investors managing their own accounts at home.
This book explains one of the most popular investment strategies today and one that works in employer-sponsored retirement accounts and accounts you run on your own: index funds.
Author John C. Bogle believes that low-cost index funds are by far the best option for investors and leans on other investors to prove his case. But his theories go beyond those of academia — Bogle is the founder and retired CEO of Vanguard, an investment management firm with over $5 trillion under management.
Best Skill-Building: How to Make Money in Stocks
In "How to Make Money in Stocks: A Winning System In Good Times And Bad," William J. O'Neil showcases his CANSLIM Investing System — a seven-step guide for minimizing risk and maximizing gains. You can trust O'Neil's advice, as this book is based on a 100-year study on stock market winners, helping over two million investors build wealth. With this expanded version, you'll find proven techniques for identifying winning stocks, as well as tips on spotting the best stocks, mutual funds, and ETFs. You'll also learn ways on avoiding the 21 most common investor mistakes. Overall, this book provides great strategies for wisely investing in stocks.
Best Biography: One Up On Wall Street
The author of another great investment book, "Beating the Street," Peter Lynch's "One Up On Wall Street" is a go-to for investors who want to draw on their own common sense and knowledge to make smart investments.
Lynch managed the prestigious Magellan Fund at Fidelity from 1977 to 1990 producing an average 29.2% annual return — more than double the S&P 500 in the same period. His investment success led the fund to swell from $18 million in assets when he took over to $14 billion. The legendary investor has plenty of lessons in "One Up On Wall Street" for you to take to your investment accounts.
Lynch is another advocate of long-term investment strategies. He is a proponent of investing in what you know best and investing in companies where you see the investment power right in front of you. From the supermarket shelves to workplace tools and products, you might already know the next big thing. And according to Lynch, you may want to put your money behind it.
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Best Reference: Berkshire Hathaway Letters to Shareholders
Each year, editor Max Olson adds more of Warren Buffett’s letters to shareholders of Berkshire Hathaway to this compilation. Buffett’s letters tell the story of how a small, failed textile business turned into one of the biggest conglomerates in the world under his leadership. Sprinkled in the book, you can find tidbits about the economy, investing, management, and more.
The lessons here track the company from $18 per share in 1965 to $297,600 per share as of the 2017 letter. If you can invest like Buffett, you should be on track to great investment success.
Most Insightful: Market Wizards
Learn about the stock market from the experts themselves with the book, "Market Wizards." In it, the world's top traders share their secrets of success with author Jack D. Schwager. Throughout interviews with dozens of "superstar money-makers" across most financial markets, including Bruce Kovner, Richard Dennis, Paul Tudor Jones, and more, Schwager sets out to understand what separates these traders from unsuccessful investors. You'll hear straight from the experts in this interview-style book, though the author also boils down their responses into a set of principles you can apply in your own trading career. Plus, this book is filled with anecdotes, including one about a trader who turned $30,000 into $80 million.
Best Conceptual: A Random Walk Down Wall Street
The updated version of this Wall Street classic helps investors understand important stock market concepts including exchange-traded funds (ETFs), emerging market investments, derivatives, and more. From Princeton economist Burton Malkiel, this book popularized the “random walk hypothesis.”
The random walk hypothesis states that one cannot consistently beat the markets, so it makes more sense to build a balanced portfolio that matches market performance. This idea also supports the efficient-market hypothesis.
Fundamental concepts in the book include technical and fundamental analysis, whether or not actively managed mutual funds make sense, and other tried and true investment theories.
Best on Housing Market: Irrational Exuberance
Robert Shiller is such a well-known and well-respected economist that he has his own index named after him. The Case-Shiller Home Price Index is based on work by Shiller and Karl Case. The Nobel Prize winner forecasted the tech and housing bubbles, and readers look to his text to better understand how bubbles happen.
Bubbles and market cycles are important to understand, and a well-formulated investment strategy can help you avoid the biggest pitfalls of the boom and bust cycle. Shiller argues that psychologically driven volatility is a risk in all asset markets, including the stock market.
This updated edition of "Irrational Exuberance" includes a look at the stock, housing, and bond markets so you can better spot the next bubble and prepare yourself before it bursts.
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