Whether you've just started thinking about putting money away for the future or you've been doing so for years, the summer of 2020 might be a particularly good time to brush up on investing basics. Books that offer investment insights and lessons can help put the current stock market volatility in perspective and provide insight into economic uncertainty.
You may not think of yourself as an investor, but if you're saving for retirement in a 401(k) or an IRA, you already are one. And though the word "investing" can seem intimidating, it just means purchasing assets that you hope to earn a profit from in the future.
So, this summer, consider embracing the term "investor" and learning some more about the market so you can feel more confident about your investing choices. Here are five investing books for beginners that can help you learn to think like an investor and build wealth for the long-term.
1. "A Beginner's Guide to the Stock Market: Everything You Need to Start Making Money Today" by Matthew R. Kratter
"The best investment that you can ever make is an investment in your financial education," according to Matthew Kratter, who is the founder of Trader University. This Amazon bestselling author has more than 20 years of investing experience, including serving as a portfolio manager and investment committee member at the famous investor Peter Thiel's hedge fund Clarium.
In "A Beginner's Guide to the Stock Market: Everything You Need to Start Making Money Today," Kratter gives readers an overview of the many different approaches to the stock market.
Kratter explains how you can manage your money different ways, including by embracing both long-term and short-term investment strategies. He also breaks down approaches to investing involving other trading vehicles like bonds, options, futures, currencies, venture capital, and real estate.
When addressing investors last month at Berkshire Hathaway's annual shareholder meeting, chairman and CEO Warren Buffett said most investors will find success in the stock market using a simple and effective approach: investing in index funds.
In his classic, bestselling investment guide, John C. Bogle — the founder of Vanguard Group, who is credited with creating the first index fund — argues that the simplest investment strategy for building long-term wealth is to stick with a mutual fund that tracks a broad stock market index such as the S&P 500.
In recent years, index funds have become an increasingly popular investment vehicle, offering investors a relatively low-fee way to diversify their assets.
Video by Jason Armesto
If you're looking for a comprehensive history of the stock market, start with "The Intelligent Investor: The Definitive Book on Value Investing." This classic has been called "by far the best book on investing ever written" by Warren Buffett.
Graham, an American economist who has been nicknamed the "father of value investing," aims to help investors avoid mistakes and teaches readers long-term investment strategies.
In one of Buffett's annual letters to Berkshire Hathaway shareholders, he specifically mentioned the chapter "The Intelligent Investor" and the way it addresses how investors should view fluctuations in stock prices. "Immediately, the scales fell from my eyes, and low prices became my friend. Picking up that book was one of the luckiest moments in my life," Buffett wrote in 2011.
"The Intelligent Investor" was originally published in 1949. In the book's revised edition, Wall Street Journal columnist Jason Zweig adds in some commentary to give readers a more thorough understanding of how to apply Graham's principles to the stock market today.
4. "One Up On Wall Street: How to Use What You Already Know to Make Money in the Market" by Peter Lynch
During his tenure as a mutual fund investor at Fidelity Investments, Peter Lynch increased one fund's assets under management from $18 million to $14 billion over a 13-year period.
In "One Up On Wall Street," Lynch teaches investors that by paying attention to the best products around them, they can find companies in which to invest before the professional analysts discover them. According to Lynch, "investment opportunities are everywhere," especially for beginners.
From the supermarkets to the workplace, he explains, we encounter products and services all day long. By paying attention, the average investor can find companies to invest in even before the professional analysts find out about them.
5. "Broke Millennial Takes On Investing: A Beginner's Guide to Leveling Up Your Money" by Erin Lowry
In addition to explaining the basics of saving, investing, and budgeting, in "Broke Millennial Takes On Investing," Erin Lowry shares her personal investing journey. Lowry explains and makes accessible investment concepts like the buy-and-hold strategy and how to rebalance your portfolio.
According to Lowry, "There's a significant lack of information out there catering to the concerns of new millennial investors." She tackles questions about investing while paying down student loans as well as socially responsible investing.
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