There are many things that scares beginners away from investing — inexperience, intimidation, and ignorance of the financial market system. However, we all have a first experience when attempting something new.
Even the most legendary stock market investor had a first-time investing experience. It helps to have a mentor, but the most practical approach for most novice investors is research.
There are many books on practical investment that can help you get started as an investor. Here are six good ones:
Margin of Safety: Risk-Averse Value Investing Strategies for the Thoughtful Investor by Seth Klarman
Klarman, a legendary hedge fund investor, wrote Margin of Safety in 1991. The book explains the art of value investing in plain language. The book now has a cult following. Only 5,000 copies were printed. Because of high demand, Amazon hardcovers sell for $800 while paperbacks are $1,500.
A Random Walk Down Wall Street: The Time-Tested Strategy for Successful Investing by Burton G. Malkiel
Malkiel’s book has been critically lauded for its unflinchingly view that most investors should engage the stock market in an efficient manner instead of fruitlessly searching for inefficiencies to exploit. A Random Walk posits that investors should avoid investing trends and instead invest based on actual, not perceived, value.
The Bogleheads’ Guide to Investing by Taylor Larimore, Mel Lindauer & Michael LeBoeuf
“Bogleheads” is the name applied to people who closely follow the investing advice and strategies of John “Jack” C. Bogle, the late founder of Vanguard and a renowned expert on index fund investing. The Bogleheads Guide is a plainly written book on mastering passive investing strategies for life.
Making the Most of Your Money by Jane Bryant Quinn
Quinn’s book helps readers take charge of their own personal finances, including investment strategies. This book offers reassuring advice and action plans for beginner investors in reference to major personal finance and life decisions. It offers advice on retirement funds, savings accounts, insurance premiums, and more.
The Intelligent Investor by Benjamin Graham
Graham lost his life savings in the 1929 stock market crash and thereafter endeavored to redefine himself as a finance expert through painstaking research and data analysis. This book, written in 1949, features investing lessons created by researching market data going back to 1871. Graham was the mentor of Warren Buffett and is considered the father of value investing.
How to Buy Stocks by Louis Engel
Engel believed that the actions of the average and novice investor would come to define the stock market more than those moves of the wealthy alone. He worked at Merrill Lynch from 1946 to 1969 and eventually became a partner and vice president. Originally published in 1954, How to Buy Stocks features investing wisdom that is relevant even today.