The 8 Best Investing Books for Beginners in 2019
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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. 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. These eight recommendations are the best investing books for beginners. They're all packed with valuable information and explain concepts in a way that's easy to understand as a novice investor.
"The Intelligent Investor" is a classic that's been around since 1949. 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 Intelligent Investor" isn't necessarily the sexiest or flashiest book around on investing for beginners. But it more than makes up for that with an abundance of grounded common-sense advice.
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.
If you're not quite ready to dive into picking individual stocks yet, mutual funds may be the solution. Mutual funds are collections of stocks, bonds and other investments in a convenient package. In this book, authored by Vanguard founder and investing legend John C. Bogle, you'll learn how to develop an effective approach to mutual fund investing.
It's one of the most comprehensive books on mutual funds for new investors, covering the four basic types of funds: common stock, bond, money market and balanced. Bogle offers guidance on what it means to adopt a passive investment strategy and how to choose mutual funds based on performance and cost-efficiency. If you're looking to learn more about index investing specifically, then "Bogle on Mutual Funds" is a classic read to put on your list.
Bonds are a completely different animal 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.
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. BiggerPockets podcast hosts Joshua Dorkin and Brandon Turner break down everything you need to know about owning investment properties in "How to Invest In Real Estate". 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.
This isn't the first book Dorkin and Turner have written on the subject of real estate investing but by far, it's the most in-depth and detailed guide they've produced yet on how to become a property investor.
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.
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.
No round-up of the best books for beginning investors would be complete without a contribution from Warren Buffett. If you're interested in learning more about the Berkshire Hathaway CEO's approach to investing or how it's enabled him to be so successful over the years, this essay collection sums it all up in one compact volume.
Buffett's approach, which hinges not on investing in stocks but investing in businesses behind them, is suited for new investors who are ready to play the long game with their portfolios. And even if that strategy doesn't necessarily align with how you plan to invest now, the wisdom these collected essays offer may prove valuable down the line as your investing ideas and preferences evolve.