The 9 Best Investing Books for Beginners in 2021
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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.
Best Overall: The Intelligent Investor
Benjamin Graham's "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 flashiest book for investing for beginners, but it more than makes up for that with an abundance of grounded common-sense advice.
Best Essays: The Essays of Warren Buffett
No list 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.
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Best on Real Estate Investing: How to Invest in Real Estate
Real estate is an asset class that's historically uncorrelated to 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 on how to become a property investor.
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Best on 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 so, "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. Author Joel 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.
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Best for Inspiration: The Simple Path to Wealth
Encouraging yet practical, "The Simple Path to Wealth" by JL Collins is taken from a series of letters the author wrote to his daughter on understanding money and investing. In the book, he argues that neglecting your finances can result in frauds making investing complex, thus more profitable for them and less attainable for everyone else. Collins presents a simple, easy-to-understand approach he initially created for his daughter in this book. He touches on a variety of subjects and concepts, including debt, asset allocations, financial independence, the 4% rule, bear markets, and so much more.
Best on Asset Allocation: 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" by William Bernstein 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.
Best on Mutual Funds: Bogle On Mutual Funds
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 "Bogle On Mutual Funds," Vanguard founder and investing legend John C. Bogle teaches you 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 this book is a classic to put on your list.
Best for Young Adults: Broke Millennial Takes On Investing
The second book of the "Broke Millennial" series, "Broke Millennial Takes On Investing" is a great guide on investing basics. As the title suggests, the book is targeted towards millennials who are interested in investing but don't know where to start. Author Erin Lowry walks readers through questions that'll particularly appeal to new, young investors, like how to invest in socially responsible ways to where one can find investment advice online. Like her previous book, Lowry breaks things down in a digestible, refreshing way, exploring topics like retirement savings and how to buy and sell stocks.
Best on Strategies: A Random Walk Down Wall Street
"A Random Walk Down Wall Street" will walk you through various investment opportunities, and this updated version even includes a chapter on new cryptocurrencies like bitcoin, as well as tax-loss harvesting. Burton G. Malkiel's book offers a step-by-step guide on investing through straightforward, long-term strategies and breaking down technical jargon for beginners. So, from investing in your 401k to retirement, this is a great primer.