Recommended investing reading list – for beginners

I’ve been meaning to put together an investment reading list for a while but it has proved to be more difficult than I first anticipated. Finally, I have one. This is part of the list for beginners. A lot of investors I talk to are surprised when I tell them how much time I spend reading about investing versus actually investing. Its something like the Pareto principle, the 80/20 rule, 80% of my investing hours are spent reading – whether it be investing books, investing blogs, company presentations, company financials, etc… I can’t remember which famous investor said that his investment work is best characterized as ‘frantic inactivity’. Or the Buffetism that investing is one of the few areas where you don’t get penalized for inactivity.

Needless to say I think that to be a successful investor who picks individual investments (not index funds) you need to read a lot. The more the better. When I look back I think I’ve read easily over 200 investment books, maybe more. I started reading about markets in general and their history. This first part of the list is my best books on markets in general. I’ve put this list into a listmania list on Amzaon. You can find it here.

The Little Book series is a great way to get started in investment reads. These are not all the books in the series just the ones I think are worth it. Some of the books in the series are not worth reading and are pure garbage. And while some of these books are quite simplistic they are great for beginners.

• The Little Book of Common Sense Investing – John Bogle
• The Little Book of Safe Money – Jason Zweig
• The Little Book of Main Street Money – Clements and Bernstein
• The Little Book of Behavioral Investing – Montier
• The Little Book of Economics – Ip

Next, are some true investment classics, mainly about markets, mutual funds, and asset allocation:

• Random Walk Down Wall Street – Malkiel
• Common Sense on Mutual Funds – Bogle
• The Only Investment Guide You’ll Ever Need – Tobias
• Stocks For the Long Run – Seigel
• Winning the Loser’s Game – Ellis
• Manics, Panics, Crashes – Kindleberger
• Extraordinary Popular Delusions and Madness of Crowds – McKay
• Irrational Exuberance – Shiller
• Four Pillars of Investing – William Bernstein
• Investor’s Manifesto – William Bernstein
• Against the Gods – the Remarkable Story of Risk – Peter Bernstein

Most investors will come out of this list thinking that markets are efficient, they can’t be beat, indexing and mutual funds/ETFs are the only way to invest, the long run is all that matters, etc… That definitely is the right conclusion after reading this series of books. You gotta start somewhere and frankly if the majority of the population could get to this point that would be a huge step forward.

In the next part of the list, intermediate level, we’ll get into books on individual stock selection, detailed asset allocation, stories of investing legends, etc…

If you have any great beginner books you think I’ve missed please let me know. Also, over time, I’ll put the whole list on a separate blog page and write some short reviews of each book. That will take a while. Enjoy!