Investing and money management is a life skill, often not taught in schools and colleges. Like any other subjects you have mastered or know about, books are a great place to start. Here is a list of books that will help you understand the basics of investing. You must research investing before you embark on your journey to be able to make informed decisions at all times.
1. The little book of common sense investing by John C. Bogle
This book is pegged as being the investing bible, irrespective of when you start investing, it is advised that you read this book before your start investing. If you have missed reading it all this while and have already started your investing journey, then like they say, “it’s never too late”.
This book provides a framework on how you should build a low-risk portfolio, there are a host of lessons which help you make intelligent investment decisions. It highlights the importance of a common fallacy among novice investors, which is to fall into fads of investing, there has to be relentless and single-minded focus to build a well-diversified portfolio.
2. A beginner’s guide to the stock market by Matthew R. Kratter
This is an ideal book to read if you intend to understand the market dynamics. They break down the workings of the market and the various types of stocks and explain the procedure to evaluate stocks, which will help you assess their short- and long-term performance. This book provides a deep dive into investing strategies and the ideal approach for the beginners to get their act together as they start investing in equities.
A great read the young investors and beginners. As a novice investor, there are numerous pitfalls that you should avoid; if you were to invest in the market without ample knowledge, you are most likely to fall into traps, which will cost you dearly. This book highlights the common pitfalls and educates you on how to avoid them. It drills down the most fundamental aspects of the stock market, which is to invest in an informed manner and have a long-term perspective.
3. The intelligent investor by Benjamin Graham
This is one of the foremost books recommended to anyone starting their equity investment journey. The book was first published in the year 1949 and has ever since been updated to align with the evolving market conditions, framework and challenges.
The intelligent investor book was written with the long-term investor in mind. The principles specified in this book are what even Warren Buffet lives by. It helps the reader understand that investing in stocks is more than just stock price and returns thereof. The book is a true connoisseur of fundamental valuation.
The intelligent investor illustrates the mechanism of value investing, which focuses on identifying and investing in undervalued stocks which will help build wealth over the long haul. If you have the time for just one book before investing in equities, then the intelligent investor is the one book you should read.
4. Broke Millennial by Erin Lowry
This is a highly recommended book to comprehensively understand the entire personal finance and money management. It touches upon one of the most crucial problems among youngsters: discretionary spending habits and debt management. The author explains how you should stay in control of your finances and why starting early and investing small matters. This book is written by a millennial and is aimed to address the millennial mindset. The language is simple and keeps the reader engaged throughout.
5. The Psychology of money by Morgan Housel
This is another well-written book with 19 stories, each of which tries to drive down the rationale behind the investment strategy and the investor’s thought process. This is a book which brings to the forefront the importance of emotions, heuristics, and behavioural biases in investment decision-making. It creates an awareness of these cognitive aspects and how they play an imperative role in financial decision-making. This book dwells on the behavioural finance aspects, acknowledging that human emotions, heuristics and cognitive biases influence investment decisions. For a very long, the impact of individual priorities and human psychology was ignored, especially from the perspective of equity market investments. This book, for one, acknowledged this very vital aspect which is also now theorised as behavioural finance.
6. Beating the Street by Peter Lynch
This is yet another book that every investor should read at least once in their lifetime. Some books provide a deeper perspective every time you read, this is one such book. The book helps one understand that investing in the stock market is not akin to gambling. Thorough due diligence can increase the probability of earning optimal returns over the long haul. The book provides real-life examples and efficiently applies investment theory to mutual funds. It provides advice on building an investment strategy that works in the real world. This book illustrates real-life market situations and the methods in which they were tackled. While the market environment is everchanging, a few pointers can come in handy to many market situations even today.
Conclusion
These are some of the Best Books on Investment; while they may offer you some sense of understanding of markets, it is essential to note that having a hands-on approach to investments goes a long way. The learnings from actually investing money in various asset classes give you unprecedented knowledge, especially for “The intelligent investor”. However, it is essential that you armour yourself before you embark on your investing journey; that is where these books come in handy.
These books are only a few great reads, but then not everyone has the time to read and probably the inclination to handle their investments by themselves. Our financial counsellors at TATA Capital Wealth can help you manage your investments and streamline your finances!
17 February 2025
5 mins read
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