There are certain topics that attract new books like flies on flypaper, like dieting, dating, and dealing with your money. With all the choices out there, and the limited time that most of us have on our hands, it can be hard to figure out which ones to pick up. Here are three classic investment books that I highly recommend to every LearnVester:
This slim work is packed with sage advice. Written by Vanguard founder John Bogle, it uses such delightful language to present the case for low-cost index funds that you'll almost forget you are reading nonfiction. The book highlights the key (and often overlooked) characteristics of successful long-term investors: Common sense, discipline, and patience. My favorite chapter is number ten, "Seeking Advice to Select Funds? Look Before You Leap." In it, Bogle lays out in straightforward language why time and again owning the entire market—through index funds—trumps trying to find the investment needle (in the form of a hot fund or stock) in the haystack. Written in 2007, this book is the little black dress of investment reads... a total classic.
Originally published in 1940, this book by Fred Schwed, Jr. is as relevant today as it ever was. The subtitle, "Or A Good Hard Look At Wall Street," says it all. Reading this book is not so different from watching a Michael Moore documentary. This book pulls back the curtain and lays bare the incentives and economics of the Wall Street machine. My favorite chapter is number three, "Customers—A Hardy Breed," in which Schwed puts forth a mirror that reveals the often stark reflection of the real lives of bankers, brokers, traders, analysts, and yes... us customers.
Reading this book is like visiting a hot dog factory. After seeing how the goods are made, you'll never look at the end product quite the same way. It was written in 2003 by Burton Malkiel—the author of the classic text A Random Walk Down Wall Street that virtually anyone who has taken an economics course has encountered. What I love about this book is that Malkiel translates his brilliant ivory tower theories into ten simple, powerful, highly actionable pieces of advice. My favorite chapter is number ten, "Don't Be Your Own Worst Enemy: Avoid Stupid Investor Tricks." It's the rare human being that won't identify with at least one of these!
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