he stock market can be a good way to make money. If you know what you’re doing. It seems like everyone is looking for the best books on investing in the stock market, but there are really only a few that are worth reading. We’ve put together a list of our favorite books on this subject so you can hopefully get your hands on one that will help you win big time!
|What is Stock Market Investing?|
|Best Books on Stock Market Investing: The List|
|Final Thoughts on Best Books on Stock Market Investing|
What is Stock Market Investing?
The place where companies and organizations list themselves to render their shares available to a wide range of investors for purchase is called stock marketing. To design the investment portfolio, an investor has the option to choose from wide stocks of different companions. Here individual and institutional investors buy and sell shares in the electronic marketplace.
Best Books on Stock Market Investing: THE LIST
1 – A Random Walk Down Wall Street | By Burton Malkiel
According to getAbstract, “The first edition of Burton Malkiel’s A Random Walk Down Wall Street appeared in 1973, a few years after the twentieth century’s first big computer technology bubble, the go-go era, popped. This, the newest and eighth edition, appears after the popping of the dot.com bubble, the last of the twentieth century’s great computer technology bubbles. Investors burned in the first bubble could have been excused; after all, they didn’t have Malkiel’s book. But it’s astounding how avidly Internet speculators threw aside all that Malkiel and others had taught them. This book belongs on every investor’s bookshelf, and ought to be consulted or at least touched to the forehead, before any investment decision. Most investment books aren’t trustworthy, because their authors are salespeople who are really making a pitch instead of trying to inform you. Malkiel is disinterested. He is a teacher with the intellectual discipline of a true financial economist, and yet he writes as vividly as a good journalist.”
Quotes from A Random Walk Down Wall Street;
“A biblical proverb states that ’in the multitude of counselors there is safety.’ The same can be said of the investment.”
“Of course, earnings and dividends influence market prices, and so does the temper of the crowd.”
“It is clear that if there are exceptional financial managers, they are very rare, and there is no way of telling in advance who they will be.”
“Can you continue to expect a free lunch from international diversification? Many analysts think not. They feel that the globalization of the world economies has blunted the benefits of international diversification.”
“The ’cycles’ in the stock charts are no more true cycles than the runs of luck or misfortune of the ordinary gambler.”
“Although stock prices do plummet, as they did so disastrously during October 1987 and again during the early 2000s, the overall return during the entire twentieth century was about 9% per year, including both dividends and capital gains.”
“It should be obvious by now that any truly repetitive and exploitable pattern that can be discovered in the stock market and can be arbitraged away will self-destruct.”
2 – The Intelligent Investor | By Benjamin Graham
A book that must be on every investor’s bookshelf, The Intelligent Investor: The Classic Text on Value Investing is the principles that are laid out by author Benjamin Graham. These precepts and guides are so great that the best investors like Warren Buffett and John Bogle use them for their success. Graham’s book was first published in 1949, which shows signs of age in its discussions, such as interest rates, savings bonds, and other time-sensitive topics. Nevertheless, the fundamentals and counsel of Graham’s concepts and principles are timeless to all investors.
Some of the key concepts you’ll learn in this book are; that investors fall into two categories, the defensive and the enterprising; you’ll learn that speculation is not investing; to become successful, an enterprise investor must treat their investment like any other business they are in; there is no evidence that supports that market timing and market forecasting even work; diversification and the concept of margin of safety can protect portfolio investing.
Quotes from The Intelligent Investor;
“It is amazing to see how many capable businessmen try to operate in Wall Street with complete disregard of all the sound principles through which they have gained success in their own undertakings.”
“Some of these issues may prove excellent buys – a few years later when nobody wants them and they can be had at a small fraction of their true worth.”
“Nothing in finance is more fatuous and harmful…than the firmly established attitude of common stock investors and their Wall Street advisers regarding questions of corporate management.”
“Good managements produce a good average market price, and bad managements produce bad market prices.”
“The intelligent investor (needs) an ability to resist the blandishments of salesmen offering new common-stock issues during bull markets.”
“Investment is most intelligent when it is most businesslike.”
“The genuine investor in common stocks does not need a great equipment of brains and knowledge, but he does need some unusual qualities of character.”
3 – Irrational Exuberance | By Robert Shiller
Shiller’s Irrational Exuberance is named after Allan Greenspan’s well-known “irrational exuberance” quote made during a 1996 briefing. The then Federal-Reserve chairman made the quote in reference to economic bubbles and as a warning of a possible overvaluation of the stock market. Greenspan’s warning came a little too early but Shiller’s warning turned out to be prophetic as the stock market crashed in 2000, one month after Irrational Exuberance was published. In the book, Shiller provides and analyzes the factors behind this investor enthusiasm, demystifies long-held investment ideologies, questions the credibility of financial reporting, and cautions against naivety and irrationality in investing.
Quotes from Irrational Exuberance;
“There are times when an audience is highly receptive to optimistic statements, and times when it is not.”
“The ascent in home prices after 1997 was much faster than the increase in incomes, and this raises concerns about the long-run stability of home prices, especially in the most volatile states.”
“At present there is a whiff of extravagant expectation, if not irrational exuberance, in the air.”
“As prices continue to rise, the level of exuberance is enhanced by the price rise itself.”
“People are optimistic about the stock market. There is a lack of sobriety about its downside and the consequences that would ensue as a result.”
“The increasingly large role of speculative markets for homes, as well as of other markets, has fundamentally changed our lives.”
“The ascent in home prices after 1997 was much faster than the increase in incomes, and this raises concerns about the long-run stability of home prices, especially in the most volatile states.”
4 – One Up on Wall Street | By Peter Lynch
This book, One Up on Wall Street: How to Use What You Already Know to Make Money in the Market is a classic for personal investment. Much of the content is pre-bubble 1989 but offers haunting warnings about inflated price-to-earnings ratios on stocks. The authors give warnings to beginning investors.
In this book, you’ll learn; never ever invest in a stock because someone tells you it will be the next Microsoft; before buying anything you need to know what type of investor you are; companies fall into six categories, so categorize your investment decisions; don’t invest in stocks, invest in companies; the best way to find good stock is to study the companies.
Quotes from One Up on Wall Street;
“The basic story remains simple and never-ending. Stocks aren’t lottery tickets. There’s a company attached to every share.”
“It’s impossible to distinguish cod from shrimp when your mutual find has lost the equivalent of the GNP of a small, seagoing nation.”
“This book was written to offer encouragement and basic information to the individual investor.”
5 – The Little Book of Common Sense Investing | By John Bogle
The Little Book of Common Sense Investing is the classic guide to getting smart about the market. Legendary mutual fund pioneer John C. Bogle reveals his key to getting more out of investing: low-cost index funds. Bogle describes the simplest and most effective investment strategy for building wealth over the long term: buy and hold, at very low cost, a mutual fund that tracks a broad stock market Index such as the S&P 500.
While the stock market has tumbled and then soared since the first edition of Little Book of Common Sense was published in April 2007, Bogle’s investment principles have endured and served investors well. This tenth-anniversary edition includes updated data and new information but maintains the same long-term perspective as its predecessor.
Bogle has also added two new chapters designed to provide further guidance to investors: one on asset allocation, the other on retirement investing.
A portfolio focused on index funds is the only investment that effectively guarantees your fair share of stock market returns. This strategy is favored by Warren Buffett, who said this about Bogle: “If a statue is ever erected to honor the person who has done the most for American investors, the hands-down choice should be Jack Bogle. For decades, Jack has urged investors to invest in ultra-low-cost index funds. Today, however, he has the satisfaction of knowing that he helped millions of investors realize far better returns on their savings than they otherwise would have earned. He is a hero to them and to me.”
Bogle shows you how to make index investing work for you and help you achieve your financial goals, and finds support from some of the world’s best financial minds: not only Warren Buffett, but Benjamin Graham, Paul Samuelson, Burton Malkiel, Yale’s David Swensen, Cliff Asness of AQR, and many others.
This new edition of The Little Book of Common Sense Investing offers you the same solid strategy as its predecessor for building your financial future.
- Build a broadly diversified, low-cost portfolio without the risks of individual stocks, manager selection, or sector rotation.
- Forget the fads and marketing hype, and focus on what works in the real world.
- Understand that stock returns are generated by three sources (dividend yield, earnings growth, and change in market valuation) in order to establish rational expectations for stock returns over the coming decade.
- Recognize that in the long run, business reality trumps market expectations.
- Learn how to harness the magic of compounding returns while avoiding the tyranny of compounding costs.
While index investing allows you to sit back and let the market do the work for you, too many investors trade frantically, turning a winner’s game into a loser’s game. The Little Book of Common Sense Investing is a solid guidebook to your financial future.
Quotes from The Little Book of Common Sense Investing;
“Most investors, both institutional and individual, will find that the best way to own common stocks is through an index fund that charges minimal fees.” (Warren Buffett)
“Successful investing is all about common sense.”
“The intelligent investor will minimize to the bare bones the costs of financial intermediation.”
“Fund investors are confident that they can easily select superior fund managers. They are wrong.”
“Mutual funds charge 2% per year and then brokers switch people between funds, costing another three or four percentage points…the general public is getting a terrible product from the professionals.” (Charles T. Munger)
“The higher the level of their investment activity, the greater the cost of financial intermediation and taxes, the less the net return that the business owners as a group receive.”
6 – How to Make Money In Stocks | By William O’Neil
Through every type of market, William J. O’Neil’s national bestseller, How to Make Money in Stocks, has shown over 2 million investors the secrets to building wealth. O’Neil’s powerful CAN SLIM® Investing System―a proven 7-step process for minimizing risk and maximizing gains―has influenced generations of investors.
Based on a major study of market winners from 1880 to 2009, this expanded edition gives you:
- Proven techniques for finding winning stocks before they make big price gains
- Tips on picking the best stocks, mutual funds, and ETFs to maximize your gains
- 100 new charts to help you spot today’s most profitable trends
PLUS strategies to help you avoid the 21 most common investor mistakes!
Quotes from How to Make Money In Stocks;
“The moral of the story is: never argue with the market. Your health and peace of mind are always more important than any stock.”
“Completely objective and recognize what the marketplace is telling you, rather than trying to prove that what you said or did yesterday or six weeks ago was right. The fastest way to take a bath in the stock market is to try to prove that you are right and the market is wrong. Humility and common sense provide essential balance.”
“The whole secret to winning big in the stock market is not to be right all the time, but to lose the least amount possible when you’re wrong.”
“Success in a free country is simple. Get a job, get an education, and learn to save and invest wisely. Anyone can do it. You can do it.”
“I made a rule that I’d buy each stock exactly at the pivot buy point and have the discipline not to pyramid or add to my position at more than 5% past that point. Then I’d sell each stock when it was up 20%, while it was still advancing.”
“Write to Securities Research Company, 27 Wareham Street, #401, Boston, MA 02118, and purchase one of the company’s long-term wall charts. Also, in 2008, Daily Graphs, Inc., created a 1900 to 2008 stock market wall chart that shows major market and economic events.”
7 – How the Stock Market Works | By Michael Becket
According to getAbstract,” This short but informative beginner’s investment manual educates readers about the United Kingdom’s stock market. Financial journalist Michael Becket’s primer on investing covers information sources, general rules for selecting shares, and the most common types of investments (stocks, bonds, gilts, futures, ETFs, options, tracker funds, and more) available to a UK investor. Becket does not break any new ground, but he is clear and thorough.”
Quotes from How the Stock Market Works;
“Making money demands effort, whether working for a salary or investing.”
“Anyone who tells you the stock market is an absolute doddle, and money for old rope, is either a con man or a fool.”
“Blue chip shares are, in the traditional phrase, the investment for widows and orphans.”
“A company’s annual report and accounts may have plenty of material for the careful calculations of stockbrokers’ analysts, but much of it will be incomprehensible, boring or irrelevant to most investors.”
“Stock market investment is for cash you can spare in the sense that if its value falls it may be disappointing and inconvenient but will not cause serious hardship.”
“So if something looks to be returning fabulously high dividends, it must be because it is – or it is seen to be – a fabulously high-risk investment.”
“As always, and this is an important rule to remember for all investments, the higher the risk the higher the return to compensate for it.”
8 – Common Stocks and Uncommon Profit | By Philip Fisher
According to getAbstract, “In 1958, for the first time, an investment guide made The New York Times’ bestseller list. Since then, that book, Philip A. Fisher’s Common Stocks and Uncommon Profits has become a classic of the personal-finance genre, educating students and influencing top investors such as Warren Buffett. More than half a century after its publication, Fisher’s advice on doing your homework so you can select long-term growth stocks still resonates. While some of the companies he refers to are long gone, many are still thriving, and though some of his examples evoke nostalgia (in 1958, for instance, color TV was new), he presciently calls for the coming of a flat-screen television. The book, which also includes Fisher’s later writings, shows how he teased out great insights by asking companies “What are you doing that your competitors aren’t doing yet?”
Quotes from Common Stocks and Uncommon Profit;
“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.”
“Scuttlebutt is simply about finding out from real, ‘Main Street’ sources if a firm is strong or weak.”
“More money has probably been lost by investors holding a stock they really did not want until they could ‘at least come out even’ than from any other single reason.”
“The successful investor is usually an individual who is inherently interested in business problems.”
“In the stock market, a good nervous system is even more important than a good head.”
“Doing what everybody else is doing at the moment, and therefore what you have an almost irresistible urge to do, is often the wrong thing to do at all.”
9 – Stocks for the Long Run | By Jeremy Siege
Much has changed since the last edition of Stocks for the Long Run. The financial crisis, the deepest bear market since the Great Depression, and the continued growth of the emerging markets are just some of the contingencies directly affecting every portfolio in the world.
To help you navigate markets and make the best investment decisions, Jeremy Siegel has updated his bestselling guide to stock market investing.
This new edition of Stocks for the Long Run answers all the important questions of today: How did the crisis alter the financial markets and the future of stock returns? What are the sources of long-term economic growth? How does the Fed really impact investing decisions? Should you hedge against currency instability?
Quotes from Stocks for the Long Run;
“No other asset class – bonds, commodities or the dollar – displays the stability of long-term real returns as do stocks.”
“The buildup of real estate and real estate-related assets in the portfolios of highly leveraged financial institutions was the primary cause of the financial crisis.”
“Standard & Poor’s, as well as Moody’s and other rating agencies…reported that the probability that collateral behind a nationally diversified portfolio of home mortgages would be violated was virtually zero.”
“Equities promise their owners nothing – stocks are risky investments, involving a high degree of faith in the future.”
“With no government aid forthcoming, Lehman Brothers, a 150-year-old investment firm that had survived the Great Depression, had no chance” [in 2008].
“Real estate prices, after having nearly tripled in the previous decade, peaked in the summer of 2006 and were heading downward.”
10 – Reminiscences of a Stock Operator | By Edwin Lefevre
According to getAbstract, “Edwin Lefèvre published this classic in 1923. His subject is Jesse Livermore, an infamous speculator, and the world’s first documented successful day trader. Lefèvre thinly disguises Livermore, assigning him the fictional name Larry Livingston. First published as a series of Saturday Evening Post articles, this book explores greed, fear, envy, and the relentless pursuit of fame and fortune, all as relevant today as in 1923 – one reason that this remains required reading for investors.
The writing style is quaintly dated and Runyon-esque. Lefèvre’s use of old market jargon (“plungers,” “bucket shops,” “bear raids” and stock “operators” instead of brokers) reminds readers that this is a journalistic, a novelistic, and a fiscal period piece. The illustrations by M.L. Blumenthal evoke its original publication date. Interestingly, market bubbles, whether in high-tech, railroads, or real estate, remain basically as emotional and nonrational as they were in the early 1920s, so the lessons here remain meaningful. Speaking from that more innocent time, Lefèvre provides lasting market insights, including Livermore’s investing secrets. He distills the eternal truth that markets only go up or down, and that investors run on fear and greed.”
Quotes from reminiscences of a Stock Operator;
“My own opinion is that Livingston will agree with me that stock speculation is an unbeatable game.”
“Prices either were going the way I doped them out, without any help from friends or partners, or they were going the other way, and nobody could stop them out of kindness to me.”
“You cannot prevent some people from guessing wrong, no matter how able or how experienced they may be because every man has many enemies within himself as well as on the outside.”
“Another lesson I learned early is that there is nothing new on Wall Street.”
“I did precisely the wrong thing. The cotton showed me a loss and I kept it. The wheat showed me a profit and I sold it out. Of all the speculative blunders there are few greater than trying to average a losing game. Always sell what shows you a loss and keep what shows you a profit.”
“If the unbeatable game of stock speculation had not been beaten by this man it at least had received a severe jolt at his hands.”
“Brokers do not listen to abstractions. If they did some of their customers might make money.”
“A picturesque figure, this breezy buccaneer of boodle, flamboyantly theatrical, incredible as one of those imperial buffoons of history that always puzzle us.”
“Any explanation except the truth will do to account for the obvious – when the obvious happens to be that the customer is an ass.”
11 – You Can Be A Stock Market Genius | By Joel Greenblatt
A comprehensive and practical guide to the stock market from a successful fund manager—filled with case studies, important background information, and all the tools you’ll need to become a stock market genius.
Fund manager Joel Greenblatt has been beating the Dow (with returns of 50 percent a year) for more than a decade. And now, in this highly accessible guide, he’s going to show you how to do it, too. You’re about to discover investment opportunities that portfolio managers, business-school professors, and top investment experts regularly miss—uncharted areas where the individual investor has a huge advantage over the Wall Street wizards. Here is your personal treasure map to special situations in which big profits are possible, including:
- Merger Securities
- Rights Offerings
- Risk Arbitrage
Quotes from You Can Be A Stock Market Genius;
“The strategy of putting all your eggs in one basket and watching that basket is less risky than you might think.”
“So one way to create an attractive risk/reward situation is to limit downside risk severely by investing in situations that have a large margin of safety. The upside, while still difficult to quantify, will usually take care of itself. In other words, look down, not up, when making your initial investment decision. If you don’t lose money, most of the remaining alternatives are good ones.”
“Even after you learn where to look for new ideas, the notion that you can cover even one-tenth of these special corporate events is a pipe dream.”
“Something out of the ordinary course of business is taking place that creates an investment opportunity. The list of corporate events that can result in big profits for you runs the gamut—spinoffs, mergers, restructurings, rights offerings, bankruptcies, liquidations, asset sales, distributions.”
“Perhaps, since the measurement of potential gain and loss from a particular stock is so subjective, it is easier, if you are a professional or academic, to use a concept like volatility as a substitute or a replacement for risk than to use some other measure. Whatever the reason for everyone else’s general abdication of common sense, your job remains to quantify, by some measure, a stock’s upside and downside. This is such an imprecise and difficult task, though, that a proxy of your own may well be in order.”
12 – A Beginner’s Guide to the Stock Market | By Matthew Kratter
Learn to make money in the stock market, even if you’ve never traded before.
The stock market is the greatest opportunity machine ever created.
Are you ready to get your piece of it?
Don’t gamble with your hard-earned money.
If you are going to make a lot of money, you need to know how the stock market really works.
You need to avoid the pitfalls and costly mistakes that beginners make.
And you need time-tested trading and investing strategies that actually work.
This book gives you everything that you will need.
It’s a simple road map that anyone can follow.
In this book, you will learn:
- How to grow your money the smart and easy way
- The best place to open up a brokerage account
- How to buy your first stock
- How to generate passive income in the stock market
- How to spot a stock that is about to explode higher
- How to trade momentum stocks
- Insider tricks used by professional traders
- The one thing you should never do when buying value stocks (don’t start investing until you read this)
- How to pick stocks like Warren Buffett
- How to create a secure financial future for you and your family
- And much, much more
Even if you know nothing about the stock market, this book will get you started investing and trading the right way.
Quotes from A Beginner’s Guide to the Stock Market;
“The single most important decision in evaluating a business is pricing power. If you’ve got the power to raise prices without losing business to a competitor, you’ve got a very good business. And if you have to have a prayer session before raising the price by 10 percent, then you’ve got a terrible business.”
“Never buy a growth stock if the stock is trading below its 200-day moving average, or if the 50-day moving average is trading below the 200-day moving average. If”
“That being said, a great time to invest in an index like the S&P 500 is during a bear market. If stock prices have been falling for 6 months or more, and there is a lot of pessimism in the air, it might be a good time to invest some extra money into index funds.”
“I want to make sure that the stock is trading above its 50-day moving average; and that the 50-day moving average is above the 200-day moving average. That looks something like this: This is a chart of The Trade Desk (TTD). The upper line is the 50-day moving average, and the lower line is the 200-day moving average. When a stock looks like this, you know that it is in an uptrend.”
“Today indexing is widely considered the safest and best way for most people to invest in the stock market. If you own the S&P 500 index, you are basically guaranteed to get the same long-term return of the U.S. large-cap stock market, fewer investment expenses.”
“Most investors are probably better off starting with the SPY since you can invest as little as a few hundred dollars. Currently, to invest in the Vanguard 500 mutual fund, you will need to have at least $3,000.”
Final Thoughts on Stock Market Investing
When it comes to saving money, investing your money into stocks is one of the best ways to grow your hard-earned savings. But with so many options out there, it can be hard to know where to start. The goal of this article is not to tell you which stocks are best but rather how to invest in stocks so that you can make the most informed decisions for you and your family’s future. We’ll cover topics like deciding on an investment plan, understanding market cycles, predicting market trends, and more!
Do you see a book that you think should be on the list? Let us know your feedback here.