Investors new to stock markets may find this very intimidating. Learning new terms, concepts, building a portfolio, picking the right stocks can very easily irritate a new investor.
Like any other discipline, to master the science of investing, it is necessary to understand the basic concepts. If everything about investing is now available on the internet, it may not yet be very clear to beginners.
Going back to books to understand the basics is the best way to go. Books written by experts or other investors who have successfully mastered this discipline can help you understand the concepts better.
There are a number of “investing for beginners” books out there, let’s take a look at 7 must-have books to better grasp the concept of investing.
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Benjamin Graham’s Intelligent Investor
First published in 1949, the book’s teachings are still highly relevant in today’s stock market environment. This book has been called the “bible” of investing by many experts and is one of Warren Buffett’s favorite investing books.
The book has many fundamentals and the importance of long-term investing and is basically centered on “value investing strategy”. It is the practice whereby investors buy stocks that are undervalued by the market but with good fundamentals and robust growth potential. This book is a layman’s guide to value investing.
Even though the book is over 70 years old, the fundamentals explained in the book are still very relevant. He advises investors to analyze a company’s earnings and ignore outside noise before investing in a stock. It also explains the essential tools for such an analysis.
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The Little Book of Common Sense Investing by John C. Bogle
This is another classic investment guide primarily focused on index funds. For new investors who are afraid of taking high risks, index funds are a safer option.
The author reveals strategies for getting the most out of low-cost index funds. Focusing primarily on building long-term wealth, the book explains a very effective and easy investment strategy.
The book explains very well the power of composition and how it is beneficial in index funds and why it is better to invest in the long term than in the short term. It provides tips and strategies for making low-cost index funds work for you. Bogle also wrote ‘Common Sense on Mutual Funds’ and ‘Enough’.
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The Warren Buffett Way by Robert G. Hagstrom
This is another very interesting book that explains in detail the investment strategies of one of the greatest investors – Warren Buffet.
It provides in-depth insight into the ace investor and how you can succeed in investing like him. It discusses in very simple to understand language, the approach that Buffett takes in investing and how a common investor uses it to generate better returns. This is one of the most popular books for anyone interested in getting started in investing as well as investors who are already in the stock market.
Lessons for Investors and Managers by Warren Buffett
This book, written by Oracle of Omaha Warren Buffet explains his principles and strategies while investing. It is a collection of his wisdom and philosophies that help him succeed. The book also explains various investment strategy options and which ones to use when.
This book is not only about investing, but it also explores in detail how Buffett works and prefers to run his business.
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