The best books on investing break down one of the biggest barriers for folks wanting to build wealth: knowledge, or the lack thereof.
Most people might think that money is the largest hurdle for those wanting to start investing in the stock market. But with funds and apps that let you get started for as little as $1, you can invest with your pocket change.
Instead, what is arguably the greatest obstacle facing both beginning and seasoned investors alike is not knowing what to do.
Unfortunately, investing is not part of most educational curricula, so it's up to investors to create their own course, so to speak. The good news is that it's never been easier to do so thanks to the plethora of engaging investing books available.
The bad news is that the abundance of choices can be a little overwhelming. This article will help you narrow it down.
Here, we look at six of the best books for investors, from quick reads you can knock out on your morning commute, to hefty tomes that leave nothing uncovered. And if you want to buy any of these books on investing for yourself or someone in your life who's just getting started, we've included links to purchase pages.
- Author: William J. Bernstein
- Purchase: Amazon.com / Barnes & Noble
Starting with the easiest – or certainly the shortest – read, William Bernstein's primer is one of the best books on investing for those looking to start their journey toward building wealth. At less than 50 pages, you could finish it over breakfast and have your first trade placed by lunch.
Bernstein proposes a strategy that's so straightforward a 7-year-old could do it. The whole process, Bernstein explains, takes only 15 minutes per year and has been shown to outperform 90% of financial professionals over the long run.
Best of all: you can get this book for free. Bernstein's website, Efficient Frontier, allows visitors to download If You Can in Kindle and Adobe Acrobat formats at no cost. (But at about six bucks, a paperback version won't break the bank and lets you support the author in the process.)
- Author: Morgan Housel
- Purchase: Amazon.com / Barnes & Noble
Many people think of investing and personal finance as mathematical disciplines where decisions are made in complex spreadsheets, but this isn't the reality.
"[Decisions] unfold at the dinner table or in a meeting room, where personal experiences and individual perspectives intersect with pivotal opportunities for decision-making," says Heather Yetman, a certified financial planner and financial advisor at Cross Coastal Advisors. This is why she recommends Morgan Housel's The Psychology of Money to her clients.
"It underscores a crucial point," she says. "Success in managing finances is not solely dependent on what you know; it hinges on how you behave."
In his book, Housel uses 19 short stories to illuminate the "often unconventional ways people perceive and handle money, offering valuable insights into deciphering one of life's most critical subjects," Yetman says.
- Author: Charles Ellis
- Purchase: Amazon.com / Barnes & Noble
"Investors cannot win, that is, beat the market," says Michael Rosen, managing partner and chief investment officer at Angeles Investments. "But investors can, and do, lose by underperforming the market for a myriad of reasons."
This is why you shouldn't focus on winning so much as not-losing, and the best way to do this, Rosen says, is by investing in low-cost index funds. "Invest in regular intervals, and let (your) money compound," he says. "It's a strategy that is simple, boring and the key to investment success."
It's also the strategy put forth in Charles Ellis's book Winning the Loser's Game: Timeless Strategies for Successful Investing. The book, which has been updated over the years, explains how markets work in a way any investor can understand.
"Ellis is one of the great thinkers and practitioners in the investment world, and every investor would be well-served to follow his timeless advice," Rosen says.
- Author: Louis C. Engel
- Purchase: Amazon.com / Barnes & Noble
Technology has changed the way we invest, from the advent of robo advisers and digital wealth platforms to fractional share investing, but the fundamentals of what a stock is and how you should invest in the market remain the same.
How to Buy Stocks by Louis Engel is "a timeless classic on investing" that "incorporates everything an investor would need to know to get started," says Andrew Crowell, a financial adviser and vice chairman of wealth management at D.A. Davidson.
In one of the best books on investing available, Engel creates a fictional company called Acme through which he illustrates the process of becoming a publicly traded company.
"Taking the reader step-by-step from business concept to capital raising, Engel expertly but straightforwardly illustrates how capitalism and the financial markets work," Crowell says. "It's an excellent primer for individuals who want to begin investing or simply want to have a better understanding of how the system works."
- Author: Benjamin Graham
- Purchase: Amazon.com / Barnes & Noble
As the entertainer and humorist Will Rogers once quipped, "I'm not so much interested in the return on my money as I am in the return of my money."
Those new to investing will often enter the stock market excited by the prospect of making extreme wealth, says Mark R. Parthemer, national chief wealth strategist and Florida regional director at Glenmede. "However, the reality is that a paradigm shift may be appropriate – and is oftentimes necessary."
Benjamin Graham's book does a "spectacular job" of teaching both new and seasoned investors the true risks involved with investing and how to manage those risks, Parthemer says. "Graham does not endeavor to teach investors how to analyze stocks, but instead aims to teach them how to create and execute a thoughtful investment policy."
He does this by explaining that an investor's intelligence shouldn't be measured by her IQ, but rather by how well she uses an emotional framework and analytical tools. "Put another way, you need to combine traditional investment principles with investors' individual attitudes," Parthemer says.
The book covers all facets of investing. "The second chapter on inflation is especially poignant today, making this a must read, or re-read," Parthemer says. "In fact, in his preface to the fourth edition, Warren Buffett proclaims that this is the best book on investing ever written."
- Author: Jason L. Smith
- Purchase: Amazon.com / Barnes & Noble
If you're looking for a resource that can help you take control of all aspects of your financial life – be it investments, insurance, legacy, taxes, Social Security, retirement income or healthcare – The Bucket Plan: Protecting and Growing Your Assets for a Worry-Free Retirement is the book for you, says Christian Cordoba, a certified financial planner and founder of California Retirement Advisors.
"In today's financial landscape, the onus is on you to be a good steward of your money," he says. If we learned anything from the major stock market declines in 2000 to 2002 and 2008 to 2009, not to mention the "COVID-19 cliff dive," it was the reminder that risk from the "sequence of returns” (explained in the book) "can wreak havoc upon one's livelihood and standard of living in retirement."
Retirees and near-retirees don't have the luxury of being able to gamble their life savings with a "buy and hope" strategy, Cordoba says. "The Bucket Plan provides a simple yet sophisticated approach to provide for your "now," "soon" and "later" goals simultaneously," and is written so that any investor, regardless of experience, can implement it.
