Investors who are new to the stock market may find it very intimidating. Learning new terms, concepts, building a portfolio, choosing the right stocks can very easily upset a new investor.
Like any other subject, understanding the basic concepts is essential to mastering the science of investing. While everything on investing is now available on the internet, it may still not be very obvious to beginners.
Better way is to go back to books to understand the basics. Books from experts or fellow investors who have successfully mastered this discipline can give you a better understanding of the concepts.
There are many ‘investing for beginners’ books available, let’s take a look at 7 must-read books to understand the concept of investing better.
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The Wise Investor by Benjamin Graham
First published in 1949, the book’s teachings are very appropriate in today’s stock market environment. The book has been called the ‘Bible of Investing’ by many experts and is one of Warren Buffett’s favorite investing books.
The book covers many of the core principles and importance of long-term investing and is basically centered around ‘Value Investing Strategy’. This is the practice where investors buy stocks that are undervalued by the market, but with good infrastructure and strong growth potential. This book is a layman’s guide to value investing.
Even though the book is more than 70 years old, the basic principles stated in the book are still highly relevant. It advises investors to analyze a firm’s earnings and ignore outside noise before investing in stocks. It also explains the tools that are needed for such analysis.
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The Little Book of Common Sense Investing by John C. Bogle
This is another classic investing guide that focuses primarily on index funds. For new investors who are afraid of taking on high risks, index funds are a safe way to go.
The author reveals strategies for getting the most out of low-cost index funds. Mainly focusing on long term wealth creation, the book explains a very effective and easy investment strategy.
The book very well explains the power of compounding and how it is beneficial in index funds and why it is better to invest in long term than short term. It gives tips and strategies to make low-cost index funds work for you. Bogle has also written ‘Common Sense on Mutual Funds’ and ‘Enough’.
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Robert G. Warren Buffett’s Way by Hagstrom
This is another very interesting book that goes into detail about the investment strategies of one of the biggest investors – Warren Buffett.
It gives a deep insight into the ace investor and how you can achieve success investing like him. It deals, in a very simple language, Buffett’s approach to investing and how a typical investor uses it to generate higher returns. It is one of the most popular books for anyone interested in starting investing, as well as investors who are already a part of the stock markets.
A Few Lessons for Investors and Managers by Warren Buffett
This book, written by the Oracle of Omaha Warren Buffett, explains his principles and strategies when investing. It is his collection of knowledge and philosophy that helps him succeed. The book also explains the various investment strategy options and when to use them.
This book not only deals with investing, but it also explains in detail how Buffett works and what it is like to run his business.
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