Whether you’re an experienced trader or you’re thinking about wading in and making your first investment, it always pays to have a good understanding of the rules and trends and to keep abreast of them as they change.
Best Overall: “The Essays of Warren Buffett”
The fourth edition of “The Essays of Warren Buffett: Lessons for Corporate America” was released in 2015, and it’s a worthy read if for no other reason than it pays to learn from the very best.
You’d be hard-pressed to name a more successful investor than Buffett, and he’s taken the time to share what he knows and has learned on the subject over the years.
The title addresses “corporate America,” but you can take that to include shareholders. The book offers an excellent explanation of the relationship between corporations and their shareholders, which makes it ideal for those new to investing who really don’t have a handle on this yet.
This collection of essays spans more than 50 years, and they’re all related in a voice that suggests you’re having a cup of coffee with the great legend himself.
Best Common Sense: “The Intelligent Investor”
Before his death, Benjamin Graham was a renowned professor known as the godfather of investing, and Zweig writes the Intelligent Investor column for The Wall Street Journal.
What’s unique about this book is its lack of “Rah! Rah! Anything is possible and anyone can do it!” rhetoric.
It mostly takes the opposite approach, although it’s not without positive encouragement. It won’t tell you how to make millions, but rather how not to lose your shirt.
The authors impart must-read basics to get you started in investing and keep you going for a long time, from recommended strategies and how to analyze stocks to a comprehensive history lesson on the stock market.
Graham published the first edition of this book in 1949, and Buffett himself has called that version “the best book on investing ever written.”
Best by an Experienced Investor: “The Little Book of Common Sense Investing”
John C. Bogle is credited with creating the first-ever index fund, so he knows a good bit about investing.
He’s also the founder of Vanguard Group, and he and Buffett are rumored to be the best of friends.
It stands to reason that you’d want to learn from both of them, and Buffett has given his endorsement to Bogle’s book, saying that “investors large and small” should read it.
“The Little Book of Common Sense Investing: The Only Way to Guarantee Your Fair Share of Stock Market Returns” takes the surprising approach that for many investors, the stock market is a lose-lose proposition.
Then Bogle explains how he’s learned to turn the odds in his favor.
This isn’t Bogle’s only book, but it’s the one that manages to cover his own personal innovative techniques and truths in a relatively short and easy read.
Best for Newbies: “A Random Walk Down Wall Street”
Investing doesn’t necessarily mean you devote hours a day and extensive energy and thought to manage a broad-based, extensive portfolio, and Burton Malkiel knows that.
“A Random Walk Down Wall Street” is invaluable reading for those who are trying to get a handle on their first 401(k)s. First you have to learn to talk the talk, or at least understand what’s being said when someone else speaks it.
Malkiel’s book includes some handy definitions of investment terms, and it applies them to various investment strategies geared toward different stages in life.
He emphasizes long-term investments rather than get-rich-quick schemes and how to predict prices and avoid common mistakes.
This is another new, revised edition of a book that’s been around for a while. “Random Walk” has sold more than 1.5 million copies to date.