Buying books about investing may be safer than buying stocks or bonds right now. Or, this may be the very best time to put new money in. Either way, reading some good books before plunging into the markets might be a wise financial move. Here are some highly recommended investment books that explore various approaches to investing:
MUTUAL FUNDS
Common Sense on Mutual Funds is one of John C. Bogle’s most popular works. Mr. Bogle has had a long and illustrious career in the mutual fund industry. He started the Vanguard 500 Index Fund in 1975, when it was the only indexed mutual fund. He remains an outspoken advocate of indexing using Mutual Funds, and attentive readers will understand why and probably agree by the time they finish this insightful book.
Common Sense is written in a clear understandable style, and well organized. It is full of practical advice as well as theory about indexing, and about low cost investing in general. It’s a good introduction that will continue to serve as a reference for any mutual fund investor.
VALUE INVESTING
The Intelligent Investor by Benjamin Graham is a tough read in some ways. Dr. Graham was a professor at Columbia’s business school starting in 1928, and he expects his readers to work at understanding him. His basic premise is that the market price is not to be relied upon as a measure of a company’s value. He explains various ways of determining the actual value of a business, and gives guidelines for buying the stock of a company.
This is one of Warren Buffet’s favorite books. In fact, Mr. Buffet was a student of Dr. Graham’s, and still follows his precepts for buying stocks at a good value. He certainly seems to be doing something right. The Intelligent Investor has plenty of advice on buying stock in tough times. There are two versions of the book available. One is a reissue of the original, and one a version that has been updated and revised by Jason Zweig. The second one may be easier as a start.
SURPRISE
The Black Swan by Nassim N. Taleb is about the impact of the unexpected. Although Mr.Taleb was a very successful trader, among his other careers, he does not restrict his commentary to purely financial matters. Read this book to encounter truly original ideas, and perhaps to get a sense of the deepest nature of the world of finance. Books by Mr. Taleb are quite popular right now, because he seems to have been quite prescient about the world’s current financial predicament.
Each of these books gives a different perspective on the problems of the modern investor. All are well written and interesting, although not necessarily a quick read. Try all three to add to your investing knowledge.