5 Books For Beginner Investors (2022)
Getting started with investing can be tough. You have no shortage of books, tutorials, courses, and resources out there to choose from. Luckily, InvestingResources is committed to finding and bringing the best resources to you.
In this article we’re going to cover five books that are excellent for the beginner (or even experienced) investor. Let’s dig in!
The Psychology of Money
The Psychology of Money is an easy to read book, and a great starting point for beginner investors. Now, be forewarned, the book advocates largely for index investing, which might not be up your alley if you find yourself on a website like this.
Given that, at the time of writing, the stock markets are taking a beating with no end in sight here's some great advice from the book:
No one wants to hold cash during a bull market. They want to own assets that go up a lot. You look and feel conservative holding cash during a bull market, because you become acutely aware of how much return you’re giving up by not owning the good stuff. Say cash earns 1% and stocks return 10% a year. That 9% gap will gnaw at you every day. But if that cash prevents you from having to sell your stocks during a bear market, the actual return you earned on that cash is not 1% a year—it could be many multiples of that, because preventing one desperate, ill-timed stock sale can do more for your lifetime returns than picking dozens of big-time winners.
A Random Walk Down Wall Street
This book is truly timeless and is always among the most recommended investing books for beginners and intermediates alike.
A Random Walk Down Wallstreet is written for the everyday human. You don't get hit with complex terminology, and you're not left to feel like you need to play catchup in the investing world.
Topics covered include ETFs, mutual funds, options, and a breakdown of technical and fundamental analysis of stocks.
If you've found yourself "stuck" when reading The Intelligent Investor (perhaps a little too dry), A Random Walk Down Wall Street is the book you need.
Reminiscences of a Stock Operator
First published more than seventy years ago, 'Reminiscences of a Stock Operator' is one of the most highly recommended and highest rated investment books of all time.
'Reminiscences of a Stock Operator' is the biography of Jesse Livermore, an investor who made and lost a fortune on Wall Street several times over. The lessons taught in this book might come from 1923, but they're still highly relevant today. Here's a taste:
"It never was my thinking that made the big money for me. It always was my sitting. Got that? My sitting tight! It is no trick at all to be right on the market. You always find lots of early bulls in bull markets and early bears in bear markets. I've known many men who were right at exactly the right time, and began buying or selling stocks when prices were at the very level which should show the greatest profit. And their experience invariably matched mine--that is, they made no real money out of it. Men who can both be right and sit tight are uncommon."
Simple Path to Wealth
An absolutely fantastic book for beginners, Simple Path to Wealth is very easy to read and comprehend for people that are new to the investing world.
Before diving in, know that this book covers a lot of topics that fall out of the "investing" realm, but I promise you it's worth it. You'll read about debt, how the stock market works, the different types of accounts you may encounter (including things like Health Savings Accounts), and why the author doesn't like dollar cost averaging.
This book is for anyone looking to understand money as a whole, and even if you have some experience, you will not be disappointed.
The Little Book of Common Sense Investing
Another highly recommended book, The Little Book of Common Sense Investing by John C. Bogle describes the simplest and most effective investment strategy there is: buy and hold low cost funds.
If the name John C. Bogle rings a bell it's because he's the founder of Vanguard, a firm that offers some of the lowest cost funds in the world.
Like the others in this list, The Little Book of Common Sense Investing is a fantastic title for those that are not sophisticated in the world of finance. It will give you the basics and help make the plunge into the investing world a little easier.
The book backs up its ideas with data, and even if you are a seasoned investor, it will change your philosophy for the better.