Knowledge is power. The most successful people are successful because they invest in themselves by learning and reading. This is considered to be one of the main aspects that separates the average from the great. One of the more rewarding topics you can learn about is investing: it takes skill, strategy, research, and most importantly, patience. The best thing you can do to hone your investing abilities is to learn from the best of the best, and luckily those folks have written books for our benefit on this very subject. Here are the best investing books for beginners from the brightest investors to ever do it.
The Best Investing Books For Beginners
I wanted to create a short, concise list of the very best investing books for beginners, written by the most successful investors of all time. Some lists out there are way too big – you have no idea where to even start! This one is simple, and makes it easy to choose which to read first based on your interests.
Read all 5 of these, and you’ll be in a position to make massive gains throughout your life. This knowledge is Evergreen, meaning it will pretty much always be applicable. By reading these books, you are investing in yourself, which is the very most important investment that you can make. The small up-front price is well worth the dividends it will pay in the long run.
*Disclaimer: Some of the links in this post are affiliate links. This means if you click on the link and purchase the item, I will receive an affiliate commission at no extra cost to you. All opinions remain my own. Read more about it here.
Note: This list is in no particular order:
1. The Essays of Warren Buffett
Author: Warren Buffett, Lawrence Cunningham
I wanted to start off with my favorite investor to emulate, Warren Buffett. I love his approach to investing, and clearly his idealogy has proven to be successful for him! Buffett values businesses that he believes in, and often ignores the big market trends the usually gets people riled up.
He emphasizes the notion of sticking to industries that you are familiar with, and businesses that you can understand. Don’t just invest in trends and industries you don’t know anything about. Take your focus off stock prices and the “bargain deals”, and focus on companies that you trust, and have done your research on.
Buffett is largely inspired by Phil Fisher and Benjamin Graham, who are two of the most highly respected individuals in the investing world. Both Fisher and Graham can be found in this list.
Studying Buffett is essentially like studying the best aspects of both Fisher and Graham’s teachings, along with Buffett’s own philosophies.
I would highly recommend this book for both beginning investors and the seasoned veteran investor.
The most important quality for an investor is temperament, not intellect. You need a temperament that neither derives great pleasure from being with the crowd or against the crowd
2. The Little Book of Common Sense Investing
Author: John "Jack" Bogle
For those who are unfamiliar with John “Jack” Bogle, he was the Founder and former CEO of Vanguard. He is considered to be one of the most revolutionary investors out there, as he essentially invented the entire concept of an Index Fund and passive investing.
John Bogle shares many of his beliefs and views in this book, allowing it to rise to the top of the list when it comes to the best investing books out there.
The beauty of The Little Book of Common Sense Investing is that it is true to it’s name, and is only 216 pages long (1st edition). The 2nd edition is 307 pages. So it’s a nice quick read, perfect for the beginning investor that is looking to learn from one of most revered investing visionaries of all time.
Don't look for the needle in the haystack. Just buy the haystack!
John C. Bogle
3. Common Stocks and Uncommon Profits
Author: Philip Fisher
If you’ve ever wondered who the inspirations were for guys like Warren Buffett, here you go. Buffett has talked about how he emulates many of Philip Fisher’s investing philosophies and strategies. This book was indeed published in 1958, so some of it’s references are a bit out-dated, but much of the core information still holds true today.
Phil Fisher is best known for his method of investing in growth stocks rather than value stocks for long-term gains. He also valued his investments based on the quality of management in the business, and the characteristics of the operations within the business.
If you’re interested in growth investing, learn from Philip Fisher, he will help you increase your earnings immensely.-
Even in those earlier times, finding the really outstanding companies and staying with them through all the fluctuations of a gyrating market proved far more profitable to far more people than did the more colorful practice of trying to buy them cheap and sell them dear.
4. The Intelligent Investor
Author: Benjamin Graham
While Philip Fisher was one of Warren Buffett’s inspirations, Benjamin Graham was his actual mentor. Buffett has described himself as “85% Graham, 15% Fisher“, but combines both of their philosophies to achieve his monumental results. Although it seems the Warren Buffett of today is starting to implement more of Fisher in his strategies. Graham was known as the “father of value investing.”
Written in 1949, The Intelligent Investor has a large focus on value investing, or picking stocks whose intrinsic values are lower than that of the market value. Graham also teaches several other core concepts: analyze for the long-term, protect yourself from loss, focus on steady profits over trying to predict the next big explosion.
Learn all about the man that enabled Warren Buffett to become the investing giant that he is today, and what shaped both Buffett and the investing world as we know it.
Note: If you’re interested in Graham’s investing style, I would also highly recommend his earlier work, Security Analysis, which was published in 1934 after the big market crash and the great depression. It is now on it’s sixth edition as of 2020.
In the short run, the market is a voting machine but in the long run, it is a weighing machine.
5. Learn to Earn
Author: Peter Lynch
If you haven’t heard of Peter Lynch, he is the best mutual fund manager to have walked this planet. As an expert in stock investments, he was able to turn the Fidelity Magellan Fund from $18 million to $14 billion in 13 years, averaging a near 30% annual return over his tenure. So yeah, I think you could probably take some of his advice to heart.
Learn to Earn is the ideal book for a starting investor. It even goes beyond investing by breaking down capitalism as a whole. It starts off with the history of business and investing, which gives you a great lay-of-the-land before you begin your investing journey.
Lynch focuses his investment advice on sticking to what you know, identifying good management characteristics of a company, basic money management principles, and being able to explain why you’re buying a particular security.
I would highly recommend this book if you’re not sure where to start or haven’t ever invested before. It will give you an excellent foundation of factual knowledge and understanding of the correlations between Business and the Market.
If you’re a little bit more advanced, then I would suggest this as a gift for a friend or family member that’s thinking about getting into the stock market. But for you, here are a couple of other Peter Lynch books that are very popular:
I think you have to learn that there's a company behind every stock, and that there's only one real reason why stocks go up. Companies go from doing poorly to doing well or small companies grow to large companies.
So Which Book Will You Read First?
Reading one of these books will teach you a thing or two about a particular school of thought when it comes to investing.
Reading all of these books will provide you with a very well-rounded education on the various investment philosophies and strategies, as well as a look into the brilliant minds that shaped the world of investing that we know today.
The perfect investing foundation for beginners.
If you’re just starting out, I’ll recommend the Peter Lynch Learn to Earn.
Or maybe you’re looking to understand the foundations of popular investment strategies. If this is the case, you should read Graham for value investing, Fisher for growth investing, and Bogle for Index Funds.
Reading Warren Buffett will give the best view of the culmination of some of the major philosophies.
Of course, there are many other brilliant investors and compelling books out there that will expand your horizons.
No matter who you choose to study, you will always find that there are underlying themes and ideas that are consistent between every single one of them.
The more of these books you read and the more individuals you study, the more you will be able internalize these underlying themes that bring forth truth amidst all of the uncertainty that lives in the stock market.
Stand on the shoulders of giants. Learn from the best, then become the best.