While it is important to invest early, it is also important to invest wisely.
Investing is fun, but only when you make money, or even beat the market if your’re that competitive. However,there are countless bumps on the journey to get there. It takes half a century for Warren Buffett to be known as the Oracle of Ohama (where he lives) and decades of experience for Peter Lynch to be a legendary mutual fund manager who averaged 29.2% returns annually.
Reading blogs, news and taking online courses can only get one so far. To be able to achieve results, any beginner needs to understand the thought process of previously successful investors to develop their own fundamentals and improve with experience in the future, The most effective way of doing so is by reading books that are written by them.
In this article, I will be recommending books according to one’s level of interest in the stocks market.
How many millionaires do you know who have become wealthy by investing in savings accounts? I rest my case.Robert G. Allen
THE INTELLIGENT INVESTOR BY BENJAMIN GRAHAM
Honestly, You can beat the market, but it is going to take a lot of work and experience to do so. This book is for slightly experienced investors as it requires a certain level of knowledge to understand. Anyone who’s in the market has read or heard of this book. It’s amazing that book is still relevant after so many years. Graham uses 100 years of stock market data to humble and convince you that you never know what the market will do and if you ever start thinking you do know, be careful. Based on the idea that you don’t know ,he then build common sense strategy for investment.
This book goes in-depth into fundamental investing. However, It was written a long time ago and the behavior of investors has changed so much since. Nevertheless, the core philosophy applies today. It’s a must read if you want to outperform others. If you give it a try, read Chapter 8 carefully, memorize everything. I promise you it will serve you well..
ONE UP ON WALL STREET BY PETER LYNCH
This is one of my favorite finacial advice books ever. Peter Lynch does such a great job expaining how you do not have to work on Wall Street to be successful in the stock market. One up on wall street provides a great overall foundation for investing and how people can utilize companies they know/understand and products they use and enjoy to make successful investment before the stock catches the attention of the large institutional investors.
Peter Lynch bags an average 29.2% annual return for 13 consecutive years as a Fidelity fund manager. That is a total 2800% return throughout his whole career. He is a fundamental investor, very much like Warren Buffett as well as many others.
A RANDOM WALK DOWN WALL STREET BY BURTON G. MALKIEL
If you are very much like myself who enjoys researching everything involving the stock market before being hands on this is the best book for you.
It sums up all the major events on Wall Street over the last 50 years, form the Asian Financial Crisis, Internet Bubble, all the way to the Housing Crisis which occurs just years ago. As a new investor you might have experienced any above events hence it’s critical to know more about them to prepare yourself for next one.
Reading all the books I mentioned above won’t make you millionaire overnight. They are meant to help build up your investment foundation and processes. It’s through consistency and discipline, that will deliver results over time; not some magic formula. These books can also help you avoid any costly mistakes and learn to pick the winners by understanding the thought process of successful investor.