Taking on investing can be a daunting task. It is easy to get lost amid so many financial concepts, complex jargon, and terminologies. In addition, when you search for resources online, you often encounter too much information.
So, it is time to dial back and pick up a book by an expert instead.
Whether you are a novice at investing or looking to maximize your portfolio returns, these five books are a must-read to help you succeed in your investing journey.
1. One Up on Wall Street by Peter Lynch
Peter Lynch, a former manager at Fidelity and their multi-billion dollar fund, penned this tell-all financial guide. This book is the perfect starting point for new and experienced investors as it breaks the stereotypes related to what a reasonable investor looks like.
The book revolves around the rise of internet stocks and then breaks down the process of transformation in modern investing across many years.
His philosophy is to ‘keep it simple.’ Instead of focussing on analyst ratings and recommendations when investing, the strategy should be to put money into companies you understand. According to Lynch, overthinking and unnecessarily complicating can ruin your chances of having a successful investment portfolio.
If you looking to dramatically improve your investing habits, this book should be on your recommended reading list:
- There are six stock categories that every investor should be aware of
- He outlines the 13 key traits to look out for if you are aiming to invest in the following multi-bagger stocks
- He defines the five traits that every investor should avoid
2. Common Stocks for Uncommon Profit by Philip Fisher
Having managed significant funds for several high-net-worth individuals, Philip Fisher gained valuable insights into how to get started on the right path to prosperous investing. Fisher’s bestseller teaches a valuable lesson to all investors. It teaches the importance of buying and holding on to the stock for the long term.
He puts the focus on qualitative analysis of a stock. The book highlights the idea of growth stock investing in a market where investors were more concerned with value. Most importantly, he recommends following your instinct rather than letting market hype or analyst recommendations influence you.
Fisher shows investors what to buy, when to buy and when to sell to get uncommon returns on their investments. It is a recommended read because:
- It outlines the approach to hunting for quality stocks
- Focusses on data-driven investing that helps decode the DNA of the companies
- Understand the traits investors should look for in a common stock
3. The Most Important Thing – Uncommon Sense for The Thoughtful Investor by Howard Marks
An American investor and author, Howard Marks, the co-founder of Oaktree Capital Management, laid out his philosophy on investing to benefit the average retail investor. The book is a compilation of the wisdom from his client memos. You can refer to them as the building blocks to successful investing.
Marks uses an anecdotal approach and illustrates the concept of ‘second level thinking’ that helps investors understand market cycles, adjusting risk versus trade-offs, and the importance of a contrarian mindset.
- It describes the relationship between price and value in the simplest manner possible
- It helps the investor understand, recognize, and control risk
- It makes you aware of how market cycles function and their pendulum like swing
4. 100 Baggers by Christopher W. Mayer
Christopher W. Mayer is the portfolio manager and Co-founder of Woodlock House Family Capital and a bank veteran with decades of experience in corporate lending. The book is a fascinating study on stocks that returned $100 for every $1 invested in a single that justifies the title.
The author tells us that there is no magic formula that helps in identifying 100 bagger stocks. Instead, he describes what these stocks looked like before becoming multi-baggers, and the common patterns that emerged amongst them.
The book emphasizes a practical approach to investing, citing several real-world examples to illustrate common financial concepts. Those looking to enhance their investment journey must read this book because:
- It focuses on the investors’ need to distinguish between activity and results
- It wants investors to concentrate on the business and not just market prices
- It shares insights on investing in fundamentally strong companies and holding on to the stock for the long haul
5. The Motley Fool Investment Guide by David & Tom Gardner
Authors David and Tom Gardner picked up their investing skills from their father and started the Motley Fool in 1993 to empower individual investors. The book is a compilation of their experience assessing individual stocks to create a diverse investment portfolio.
The guide has something to offer to suit every retail investor’s appetite, regardless of how much money you may have to invest.
The newest book edition was revised to meet the needs of the modern retail investor. It should be on your reading list because:
- You can identify high-growth stocks that can beat the market in the long term
- Go beyond conventional measures to find young companies with growth potential
- Teaches how to use online resources to locate untapped sources of data
These five are some of the best books that can get you started with your investment journey. So, seek inspiration, learn to navigate the markets, and build a solid and diversified portfolio that will deliver gains in the long term.