Sixty-five percent of adults said they think investing in the stock market is either scary or intimidating, according to a 2018 Ally Invest survey
Among their fears? Making the wrong investment, trusting the wrong sources, or not having enough money to invest.
Whether you’re a new investor confused about the best strategy for your fledging portfolio or haven’t taken the investment plunge yet, we’ve got you covered with our picks of the best investing books for beginners.
1. ‘Warren Buffett’s Ground Rules,’ by Jeremy C. Miller
“Warren Buffett’s Ground Rules” wasn’t written by the famous investor and entrepreneur himself. But, this compilation of letters he wrote to his partners in the early days of Berkshire Hathaway still has lots of prudent advice from Buffett.
The letters outline his investing strategies, most notably his affinity for conservative investing. Buffett focuses on strategies for staying disciplined and growing returns by playing it safe, something everyone could use a reminder of in a market like this.
2. Best for Beginners: A Beginner’s Guide to the Stock Market
Young investors who do not have experience with the stock market will learn the ins and outs of the market with this guide. Matthew R. Kratter breaks down the types of stocks and how they work, while explaining how to analyze stocks to find ones that should perform well in the short-term and long-term.
One key area this book addresses is the mistakes beginning investors often make and how to avoid them. “A Beginner’s Guide to the Stock Market” also dives into investing strategies and the methodologies that are ideal for new, aspiring investors, making this a great first read among investing books
3. The Psychology of Money: Timeless Lessons on Wealth, Greed, and Happiness
- Author: Morgan Housel
- Purchase: Amazon.com
Money management isn’t as math-centric as you might believe. Most financial decisions aren’t made by spreadsheets; they’re made by people, and people have emotions, biases and unique ways of viewing the world. These feelings and perspectives can cloud people’s understanding of finance and ultimately get between investors and long-term success.
Recognizing this is the first step to avoiding the emotional blunders – like panic selling or jumping onto the hot-stock bandwagon right before it derails – that so often thwart beginning investors.
The second step to avoiding emotional biases: Reading Morgan Housel’s The Psychology of Money.
As Housel will tell you, successfully managing your money is less about how intelligent you are and a lot more about how you behave. Even the smartest person can make a lousy investor if they can’t keep their emotions in check when the market takes a tumble.
Housel’s book lays out the 20 “flaws, biases, and causes of bad behavior” that people have concerning money, and how these flaws can lead to bad financial outcomes.
Beginning investors shouldn’t think of this as a recipe for how to invest, but a means of sticking with whatever recipe you use to invest.
4. Best on Mutual Funds: Common Sense on Mutual Funds
If you want to invest, then you may need to familiarize yourself with mutual funds at some point. Enter John C. Bogle’s “Common Sense on Mutual Funds,” which was originally published in 1999. Keep in mind that a mutual fund is an investment vehicle through which investors pool their money to invest in securities; it’s also an easy way to diversify your portfolio for a low price. The book’s updated version covers topics from the basics of mutual fund investing to regulatory changes to how to build an investment portfolio with staying power. Bogle is also the author of “The Little Book of Common Sense Investing” and “Enough.”
5. RICH DAD, POOR DAD BY ROBERT T. KIYOSAKI
I first came across this gem on BookTok, which has catapulted this already-famous investment book to a wider audience. Rich Dad, Poor Dad specifically looks at how investors should think about money. For example, we have all been told that our house is an asset. Kiyosaki, however, asserts the opposite because houses equal mortgages, meaning they take away money from you rather than put it in your pocket. The book will help you unlearn some of the deleterious financial advice we’ve been fed through schools and other institutions.
6. THE INTELLIGENT INVESTOR BY BENJAMIN GRAHAM
Graham’s classic book has sold over a million copies and for good reason. The Intelligent Investor is chockful of time-tested financial advice that also includes commentary on the realities of the 21st-century stock market as well as practical guidance on how to apply Graham’s principles.
7. Best for Investing in Stocks: The Modern Guide to Stock Market Investing for Teens
“The Modern Guide to Stock Market Investing for Teens” covers key tips and strategies for those interested in investing in the stock market. Published in 2020, this quick read was written by a teenager in California, Alan John, who wanted to help young people see the importance in beginning their investing journeys early.
The author urges teens and college students to start investing with any amount of money they can spare, explaining how this invested dollar can grow over time, thanks to compound interest and market growth. Young investors hesitant about investing will find simple strategies for starting a portfolio, while also gaining personal finance and retirement investment knowledge. Overall, this book tackles often complex and out-of-reach topics in an approachable way.