We went to our in-house investment experts to learn what books they believe every investor should read. Here's what they had to say.
This is by Peter Lynch who is an iconic investor and used to manage the Fidelity Magellan Fund, a successful mutual fund that many of you likely have in your 401k plans. His investment philosophy is simple, buy what you know. This is a book I point to often when talking about the stock market. One of my many highlighted quotes in the book is, “Ultimately it is not the stock market nor even the companies themselves that determine an investor’s fate. It is the investor.” This quote is spot on and talks to point that longer term investing is successful and not successful based on the person investing controlling their emotions. So many basic principles are explained through years of experience in this book. It’s a must read.
If there was a bible to investing this one would be it. Benjamin Graham is looked at as the godfather of value investing. In this book his views and investment knowledge are found in every page. It can be a deep read for many, but it is a must have for investors. Maybe you don’t know of Benjamin Graham, but I am sure that you know of Warren Buffett. Warren Buffett’s teacher was Benjamin Graham. A lot of the lessons that Warren Buffett has used to become the most iconic investor of our time were learned from Benjamin Graham. Hence, the reason to start looking for some of the knowledge that made Buffett so successful would be within the pages of Benjamin Graham’s Intelligent Investor.
This book is one of the simplest yet most powerful books on how to “pay yourself first.” David Bach is a national best-selling author who has written Smart Women Finish Rich, Smart Couples Finish Rich, and The Finish Rich Workbook. In his book Automatic Millionaire, Bach shares the “real” secret to getting rich, and the one thing that people need to do. He gives his readers a realistic system, based on timeless principles, with everything they need to know. His main theme is that you need to have a totally automatic plan to pay yourself first -a plan that will automatically secure your future and pay for your present.
Though not directly related to investing, I recommend Outliers by Malcolm Gladwell. This book teaches the fundamentals of success, luck, and timing. The lessons here from Gladwell can help guide your career, business, and investments. According to Gladwell.com, “Gladwell argues that the true story of success is very different, and that if we want to understand how some people thrive, we should spend more time looking around them- at such things as their family, their birthplace, or even their birth date. And in revealing that hidden logic, Gladwell presents a fascinating and provocative blueprint for making the most of human potential.” This is a spectacular book and one that I highly suggest everyone read- no matter what industry you work in, what your financial situation is, or what you believe your future might look like. Gladwell has a way of speaking to every person out there.
Investors are their own worst enemies. It is so easy to get wrapped up in the daily news PLUS day watching your investment accounts and values fluctuate thousands of dollars and making poor decisions based on the emotion of this exercise. Patient, long-term investors earn great returns for taking the day-to-day risk of the stock market. Learn how to take your emotions out of the equation by understanding this side of investing.
This book has great investment advice: KISS: Keep It Simple Stupid. Keeping costs low and strategy simple can contribute greatly to an investor’s return over a long time period. John Bogle, the father of index investing, delivers an eloquently simple summary of how to truly understand your investments and not chase the “hot” or “flavor of the day” stock. He teaches readers about consistency, low-cost and simple approaches to saving and investing.
This book is an entertaining look into one of the first and largest chop shop brokerage firms in history. It’s a behind the scenes story of pump and dump schemes, drug abuse, deceit, and greed. Jordan Belfort, the man behind Stratton Oakmont, was banned from the securities business for life by 1994 and went to jail for fraud and money-laundering. Written by Belfort, he recounts his experience in a way that you won’t believe what you’re reading. It covers his decade of success with straightforward accounts of how he worked with managers of obscure companies to acquire large amounts of stock with minimal public disclosure, then pumped up the price and sold it, so he and the insiders made large profits while public investors usually lost. The good news? Today, the ability for the public majority to receive the right financial advice model is more accessible than it has ever been.
The Big Short is a story about four outsiders who predicted the credit crisis and housing bubble collapse before anyone else. Michael Lewis attempts to clarify the confusion and opacity in the root cause of what crashed the U.S. stock market. Lewis does a great job of telling the story from these four investors who made huge bets against the U.S. economy and housing market in particular. A gamble that paid off in a big way, but not without turmoil in its wake. After reading this, the layman will say, “how did more people not see that coming?” Just remember, it’s a nod to Lewis’s storytelling ability.