As I mentioned on Friday, many investors may not have gotten the education they need to make wise investing decisions. Not everyone needs to be a financial advisor, but having a basic knowledge of how markets work would go a long way in shaping your financial future for the better.
The following is a list of books that I recommend to people interested in learning more about the financial markets.
- Why Smart People Make Big Money Mistakes and How to Correct Them by Gary Belsky and Thomas Gilovich – A great explanation of the behavioral mistakes investors make simply because they are human.
- Capital Ideas by Peter Bernstein — An extremely well-written history of modern finance and the management of risk. I highly recommend all of his books.
- The Four Pillars of Investing by William Bernstein — Simply one of the best writers on finance we have today. He’s another one where I highly recommend all of his books.
- Winning the Loser’s Game by Charles Ellis — A simple book with a simple message. Every word is gold. His book Investment Policy is also a classic.
- Investment Illusions by Martin Fridson — A highly entertaining book that exposes the false assumptions many investors and professional money managers have when playing the stock market.
- The Fortune Tellers by Howard Kurtz — An expose of the conflicts of interests between the media and investors and how information-hungry investors are often too quick to follow publicity bandwagons.
- A Random Walk Down Wall Street by Burton Malkiel — Simply a classic.
- Beyond Greed and Fear by Hersh Shefrin — A wonderful tour of the field of behavioral finance.
- The Fortune Sellers by William Sherden — A well-written expose on the failure of the economic and stock market forecasting professions.
- The Prudent Investor Act by W. Scott Simon — Required reading for any fiduciary.
- Unconventional Success by David Swensen — Describes how the actively managed mutual fund industry provides a disservice to investors.
- Fooled by Randomness by Nassim Nicholas Taleb — Clearly shows how most investors are prone to confusing dumb luck and skill.
- The Terrible Truth About Investing by Bruce Temkin — A great book on investment strategy.
- The New Coffeehouse Investor by Bill Schultheis — A great book for the novice investor.
My own books may also be a great source of information, in particular the trilogy of “Only Guides” — Winning Investment Strategy for equities, Winning Bond Strategy for fixed income and Alternative Investments for less common investments — as well as Wise Investing Made Simple. Finally, I would recommend any book by John Bogle, who is not only a great writer but a great man.
