In today’s article, we’ll be discussing the best books about making investments (Part 2). Click here for Part 1.
If you want to invest as an expat or high-net-worth individual, which is what I specialize in, you can email me (advice@adamfayed.com) or use WhatsApp (+44-7393-450-837).
Table of Contents
Introduction
Perhaps you are wondering why we need another top book about investments, because there are quite a few such collections on the Internet.
The fact is that in such lists of books about investing, literature is often popularized that has an extremely indirect relationship to finance, the stock market, economics and is completely unsuitable for teaching anything.
Instead of conveying the necessary knowledge, the authors of these books convince readers of the need for investment, charge them with false optimism and say nothing about the risks that you need to be aware of even before you open a brokerage account.
The popularization of these books leads to the fact that crowds of people enter the market without thinking about what they are doing, why they are doing it, and whether now is the right time for this. People think that the stock market is a friendly place where everyone can get rich, they buy tons of popular stocks in the hope of capital gains and are not very careful. But the stock market is a gloomy jungle, where someone’s blood is constantly shed, wild animals live and full of robbers who will certainly want to take all your money from you.
Below you will find a list of the best investing books for beginners. Thanks to these books, you will learn how to make informed and balanced decisions regarding the purchase of securities of a particular company, without regard to the opinions of analysts or the investment ideas of your broker.
“Security Analysis: 6th Edition” by Benjamin Graham, David Dodd
A great book by Benjamin Graham that cannot be ignored is ‘Security Analysis’. It was co-authored with David Dodd before Graham’s most popular book ‘The Intelligent Investor’ even saw the light of day.
If ‘The Intelligent Investor’ tells you about investing in general, how to stay calm regardless of the market situation, how to quickly select stocks for a portfolio, then ‘Security Analysis’ will open the doors to the world of corporate finance for you. It was this book that at one time gave the first impetus to the emergence of the profession of stock analyst in the world.
When you first encounter the task of evaluating the performance of a company, you will probably come across recommendations about the need to study the financial statements of this company. This is great advice, but for a novice investor, it’s not entirely obvious how to approach these reports.
This is where the book “Security Analysis” will come to your aid. We recommend you to read it and immediately put into practice what you have just learned. It is guaranteed that after reading only the first and second parts of the book “Security Analysis” while studying financial statements along the way, you will already know more about the company than 99% of those who are currently its shareholders.
Benjamin Graham and David Dodd look at financial statements literally under a microscope, focusing on things you would never look at in your life. They teach you how to evaluate companies individually and compare them against each other using a set of financial ratios, and then draw the right conclusions based on the information studied, backed up with a lot of examples from the past.
This book can be also called a guide for beginning investors. However, if you want to delve into the fundamental analysis of stocks, learn how to read and understand the financial statements of companies, and stop flinching every time the stocks in your portfolio suddenly sag for unknown reasons, this book should be your desktop. Available here.
“Company valuation under IFRS: Interpreting and forecasting accounts using International Financial Reporting Standards” by Kenneth Lee, Nick Antill
To assess the company’s activities and make an investment decision, this book will definitely put everything in its place.
Here it would be appropriate to recall the rule formulated by Vilfredo Pareto: 80% of the result will come from 20% of the effort (reading the books that we reviewed earlier), and only 20% of the result will give you the book “Company Valuation”, but you will spend a lot of effort to learn it.
The most basic difference (it is also a virtue) of this book is that here we are talking about International Financial Reporting Standards (IFRS). Another undoubted advantage is that in some aspects the differences between IFRS and US GAAP are indicated, which will undoubtedly be useful if you want to compare.
The main goal of the book is to tell the reader about what data he needs to correctly evaluate a particular company and how the current financial reporting standards can help him in this matter. In addition, the differences and features of the assessment of stable, cyclical and growing companies from different industries are considered.
In spite of the importance and difficulty of the problems spoken in the book, it is written in a pretty comprehensive language, which makes it quite accessible especially to those who have the need to understand these issues.
If the other books in this collection are the ocean, then ‘Company Valuation’ by Nick Antill and Kenneth Lee is the Mariana Trench. If you fully assimilate the material presented in it, you will always be one step ahead of any ordinary investor in matters of analysis and evaluation of companies. Available here.
“Trading for a Living: Psychology, Trading Tactics, Money Management” by Alexander Elder
‘Trading for a Living’ successful trading is based on the three M’s: mind, method and money. ‘Trading for a Living’ will help you master all three of these areas:
* How to become a cool, calm and collected trader
* How to benefit from reading the behavior of the market crowd
* How to use a computer to find good deals
* How to develop a powerful trading system
* How to find deals with the best chance of success
* How to find entry and exit points, set stops and take profits
‘Trading for a Living’ helps you discipline your mind, shows you how to trade the markets, and shows you how to manage the money in your trading accounts so that no streak of losses knocks you out of the game. To get even more out of the ideas in Trading for Life, check out the companion book, The Trading for Life Tutorial. It asks over 200 multiple choice questions and 11 rating scales to hone your trading skills. For example: Question markets rise when
* there are more buyers than sellers
* buyers are more aggressive than sellers
* sellers are afraid and demand a markup
* buying more shares or contracts than selling
Available here.
“How to Trade in Stocks” by Jesse Livermore
Jesse Livermore was a loner, maverick and the most successful stock trader who ever lived. Written shortly before his death in 1940, ‘How to Trade in Stocks’ offered traders their first account of the famous silent operator’s trading system. Written in Livermore’s inimitable, serious style, it weaves fascinating autobiographical and historical details with step-by-step instructions:
• Reading Market and Stock Behavior
• Analysis of leading sectors
• Time to market
• Money management
• Emotional control
In this new edition of this classic, trader and Livermore’s leading expert Richard Smitten sheds new light on the philosophy and methods of Jesse Livermore. Drawing on Livermore’s personal papers and interviews with his family, Smitten provides invaluable insights into Livermore’s trading formula, as well as advice on how to combine it with modern charting techniques. Also included is the Livermore Market Key, the first and still one of the most accurate methods for tracking and recording market patterns. Available here.
“Investing for Dummies” by Eric Tyson
Invest in your financial future with this valuable, popular, and easy-to-follow guide.
This latest edition of ‘Investing for Dummies’ is filled with new and updated content to help you grow your portfolio today! This includes time-tested tips, updated investment advice, and strategies that reflect changing market conditions. Investing can be a daunting prospect, but this resource will serve as your primer on all aspects of the topic, including how to develop and manage a portfolio, invest in stocks, bonds, mutual funds, and real estate, start a small business, and understand the critical tax implications of your investment decisions. Updates have been made to sections on resource investing, health insurance, retirement planning, and investment options, among others.
‘Investing For Dummies’, 7th Edition will help you invest with confidence. Dive into new content for sage advice, whether you’re starting to make plans, investing through a 401(k) company, or trying to shore up your savings before retirement, this book covers it all.
• Examines all aspects of investing, including how to develop and manage a portfolio that includes various investment vehicles.
• Features expanded and updated coverage of investment resources, retirement planning, tax laws, investment options, and real estate.
• Offers time-tested advice and strategies from Eric Tyson, a nationally recognized personal finance consultant and best-selling author.
If you want solid guidance and proven investment strategies, ‘Investing for Dummies’ will help you take control of your investment options. Available here.
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Adam is an internationally recognised author on financial matters, with over 693.5 million answer views on Quora.com, a widely sold book on Amazon, and a contributor on Forbes.
