What are the best stock market books for beginners?
If you want to learn to invest from scratch, there’s a right and wrong way.
The right way is to first learn how the stock market and investing works for the individual investor, then get into strategy and tactics.
The wrong way is to learn strategy and tactics first, neglecting the fundamentals.
You need to start with the basics.
I’ve organized this list into three separate sections:
- Beginner Books
- Intermediate Books
- Advanced Books
If you want to learn how to invest and save for retirement, the beginner books will give you the knowledge to beat 90% of investors.
If you’re looking for an active approach to investing, with the goal to beat the market, read the books for intermediates (But only first after reading the books in the beginner section)!
Last, if you’re thinking about a career in investing, move on to the advanced books.
First, let’s start with the best stock market books for beginners.
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You don’t need to devote hundreds of hours to learning the stock market to invest. You only need to understand a certain set of principles. The books I list below are going to help you learn the principles.
In the stage, you don’t need to know fancy terms or math equations. All you need to know is the investment that’s going to give you the highest after-tax return for your level of risk.
There are three books that I recommend to investors in this stage:
- The Little Book of Common Sense Investing: The Only Way to Guarantee Your Fair Share of Stock Market Returns
- A Random Walk down Wall Street: The Time-tested Strategy for Successful Investing
- The Bogleheads’ Guide to Investing
Intermediate Investing Books
So, now you have the basics down. You understand the difficulty of beating the market. You understand the importance of investing in IRAs and 401(k)s. You know what an index fund is and why it’s a great strategy for most investors.
You may just want to stop.
But, you’re wanting to learn more.
What are the great books for investors at this stage?
There are three I recommend:
Each of these books gets into the tactics of how you can achieve higher returns than the market provides. Not that it’s easy and not that history will repeat itself, just that there are ways other investors have succeeded.
Books for the Advanced Investor
So, you’re beyond the basics. You’re looking to dive deep into investment texts.
Maybe you have a career in finance. Maybe you want to risk a small percentage of your net worth to see if you can beat the market.
What books should you be reading?
Here are five:
- The Intelligent Investor
- Security Analysis
- The Essays of Warren Buffett
- Margin of Safety
- Common Stock, Uncommon Profits and Other Writings
You’ll be happy to know, this isn’t my list. This list was derived from the most recommended investment books of all time.
Summary: Best Books to Learn Investing
Billionaire investor Charlie Munger has said,
“I don’t think you can get to be a really good investor over a broad range without doing a massive amount of reading. I don’t think any one book will do it for you.”
Your journey starts now.