If you are looking for books to improve your understanding of investment, the following 9 recommendations should be your initial point of reference. This list is organized from beginner to advanced levels, and each book is highly informative, promising a lasting impact on your knowledge.
Beginner Level
1) Rich Dad Poor Dad (Robert T. Kiyosaki) Rich Dad Poor Dad, known as the investment 101, has topped the Personal Finance book for nearly 25 years. It is the author’s story of growing up with two dads – rich and poor, which helps you to build the financial habits of the rich and teaches the need of utilizing your money to work for you. As an entry level classic, Rich Dad and Poor Dad challenges your financial viewpoints towards money and investing. This is the lesson that you can never get at school. 2) Stock Investing for Dummies (Paul Mladjenovic) Stock Investing for Dummies is a thorough manual explaining the facts and concepts behind all the numbers. It guides you step by step to make a good investment, from funding the first purchases to looking at the company’s financial statements and maximizing the gains. This book is where you start gaining confidence in investing, also building a portfolio that does well in the long term. 3) The Little Book of Common Sense Investing (John C. Bogle) Basic concepts are never enough for you to make a great deal in the stock market, but the way to work smart. Written by the founder of The Vanguard Group, The Little Book of Common Sense Investing shows you the simplest yet most effective investment strategy for building wealth in the long term. It focuses on building a diversified portfolio without bearing the risks from individual stocks or fund manager selection but enjoying the benefits of compound returns. This is worth reading to establish a long-term investment portfolio.
Intermediate/Advanced Level
4) The Snowball: Warren Buffett and the Business of Life (Alice Schroeder) Amazon.com's best business and investing book of the year 2008, The Snowball: Warren Buffett and the Business of Life is a biography of Buffett written by Alice Schroeder. Schroeder spent over 2,000 hours reading Buffett's personal files and interviewing Buffett, his family and business associates. The book details the guru’s work, opinions, struggles and wisdom, and provides great insights on his personal life and philosophy . 5) A Random Walk Down Wall Street (Burton G. Malkiel) Written by Burton Gordon Malkiel, a Princeton University economist, A Random Walk Down Wall Street is a book on stock investing that popularized the random walk hypothesis. This book touches upon a range of investment topics, including different valuation models, market manias and bubbles, investor behaviors, market timing strategy, and so on. The book also provides a useful review on how an investor could construct a reliable portfolio taking risk and diversification into consideration. It is also one of the books recommended by Warren Buffet. 6) The Most Important Thing Illuminated (Howard Marks) When it comes to investment, you cannot do the same things that everyone else does and still expect to outperform. To succeed, Howard Marks argues, you need to have “second-level thinking” and be able to see things that other people can’t see. In The Most Important Things Illuminated, Howard Marks expounds on this concept of second-level thinking and touches upon themes such as the price/value relationship and defensive investing, giving investors lessons to think deeply and be “contrarian". 7) The Intelligent Investor (Benjamin Graham) Described as “by far the best book on investing ever written” by Warren Buffett, The Intelligent Investor is a timeless classic that has been influential for almost a century. The central theme of Graham's philosophy is not profit maximization, but loss minimization. Warren Buffett once commented on the book, “Chapters 8 and 20 have been the bedrock of my investing activities for more than 60 years. I suggest that all investors read those chapters and reread them every time the market has been especially strong or weak.” 8) The Psychology of Money (Morgan Housel) Investors always have the mindset of trading stocks, but they do not make decisions on the spreadsheet, but at the dinner table, in the meeting room, or in other casual environments instead. The Psychology of Money shares stories about others exploring their thoughts about money. You can find ways to behave while looking for more in the stock market. 9) Thinking, Fast and Slow (Daniel Kahneman) Buying or selling is always the struggle of investor beginners, but Thinking, Fast and Slow, written by a psychologist, can take you on a tour of the mind and explain the two systems that drive you to think. Written by Daniel Kahneman, a Nobel Prize winner, this book introduces different techniques to make decisions rationally and effectively, not being hindered by emotions.
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