What are the Best Stock Market Books for New Investors? - Financial Analyst Insider
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What are the Best Stock Market Books for New Investors?

What are you doing right now to increase your personal wealth? Are you planning for retirement? If you are interested in creating long term wealth, strategically investing in the stock market represents one of your best options.  The stock market is accessible to anyone and relatively easy, if you know what you are doing. While there is plenty of opportunity to earn excess returns in the stock market, it is important to be fully informed of the potential pitfalls and risks.

We took a look at some of the best books on the stock market that provide a great foundation for new investors to learn how to benefit from smart investing strategies.

The Little Book of Common Sense Investing

You can’t start learning about the stock market without starting with man who brought the power of low cost, index investing to the average investor, John Bogle. Mr. Bogle started a revolution when he marketed Vanguard’s low cost index funds directly to individual investors.  This book represents a great place for new investors to start learning about the markets in a simple and very easy to understand manner.

You won’t learn about the latest fads and trends, this book focuses only on long-term and time tested strategies to build your portfolio. This book focuses on index funds and covers important information such as:

  • Written for first time investors and stock market beginners.
  • Ideas and strategies that are real-world focused.
  • Ways to effectively build a low-cost and low-risk portfolio.
  • Understand the three main sources that generate stock returns.
  • How to take advantage of compounding returns.

The Four Pillars of Investing

Another classic that stands the test of time, the Four Pillars teaches you the skills you need to invest on your own – without paying a financial advisor to do it for you. While this book is geared for new investors, this includes some more advanced topics and may be best suited for readers that already have a base level of knowledge.  It is down-to-earth, easy to understand and focuses on these key topics:

  • Understanding the relationship between risk and reward.
  • Discovering the history of the stock market.
  • How the mind of the investor factors into the market.
  • Why taking advice from a financial advisor can be a mistake.

The Bogleheads’ Guide to Investing

Bogleheads is a community of like minded investors dedicated to following the wisdom of low cost investing as taught by John Bogle.  Mr. Bogle even provided a forward to the book!  This book represents another great place for new investors to start their investing journey.  The book is both fun and informative without over-loading you with too much jargon.  It is full of both wisdom and banter as it debunks common misconceptions about investing, that are often promoted by Wall Street. In this book you’ll discover:

  • How to set your financial goals and a build a portfolio to support them.
  • Develop habits that lead to a healthy investment portfolio.
  • How to maintain your buying power and keep taxes low.
  • Why the advice from Wall Street doesn’t work.

A Beginner’s Guide to Investing

As the title indicates, this book is another great place for new investors to start building a solid understanding of the stock market.  This book cuts through the confusion and contradictory advice and focuses on the basic principals that will help you grow your portfolio. It includes things like:

  • How to realistically double your money in 7 to 10 years (without taking excessive or unnecessary risks).
  • Ways to outperform even the professionals with your portfolio.
  • Strategies to use when choosing an investment fund.
  • Ideas for maximizing your tax savings.

The Intelligent Investor

Although you may not be familiar with Benjamin Graham, some of the most famous and well known professional investors consider his work to be something of the most valuable information about stock market investing.  This book will introduce you to some important valuation concepts and is probably best suited for investors that have a basic foundation.  This book was originally written in 1949, but the core concepts outlined are timeless. Its wisdom covers topics such as:

  • Developing long-term investment strategies.
  • The philosophy of value investing.
  • Timeless principals applied to today’s market.
  • Thorough understanding of how the stock market works.

One Up On Wall Street

If you’re already interested in the stock market, you have no doubt come across the concept of active vs passive stock market investing.  You’ll find many arguments on both sides of the coin.  John Bogle is the father of index or passive investing and you could say that Peter Lynch is one of the most well known active investors.

In his book, One Up On Wall Street, well-known mutual fund manager, Peter Lynch, explains why the everyday investor has an advantage over professional financial advisors. This book provides solid advice for anyone interested in capitalizing on the opportunities in the stock market. If you’ve caught a little bit of the active management bug, this book will give you straightforward advice that you can utilize to develop your own stock picks.

  • How to recognize investment opportunities through your everyday encounters.
  • Ways to decipher “long-shot” stocks from “no-shot” stocks.
  • Guidelines for investing in different types of companies.
  • The importance of having a long-term investment strategy.
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