As we head into lockdown 2.0 and spend more time indoors, why not kick-start or brush up on your investing knowledge? Here are our top 5 must-read books.
1. “Unshakeable: your guide to financial freedom”, by Tony Robbins
Tony Robbins interviewed some of the world’s leading financial minds and here delivers a playbook for financial success.
The book is split into three sections. The first section helps you understand the stock market and its patterns. You’ll learn to recognise what’s happening and rather than worry about crashes and corrections, you’ll expect them (and know what to do when they happen). The second section breaks down the core principles of investing (don’t lose money, minimise risk and maximise reward, invest tax-efficiently, diversify your portfolio). The third section looks at the psychology of wealth. Robbins explains that the biggest threat to your wealth is you. This is a great introduction to investing, and excellent reading for everyone.
2. “Principles: life and work”, by Ray Dalio
Ray Dalio, billionaire investor and founder of Bridgewater Associates, one of the world’s largest hedge funds, shares his insights and experience as one of the world’s most successful businessmen.
In business and in life, he shows how having solid principles can improve your decision-making and keep you from second-guessing yourself.
Over three parts, Dalio tells stories of his own experiences, shares some of his mistakes in the hope that others can learn from them, and offers principles to live and work by. He encourages us all to become radically open-minded, and finally to think about and discover our own ‘principles’.
3. “The little book of common-sense investing”, by John C. Bogle
John Bogle, who founded Vanguard, one of the world’s largest investment companies, offers an alternative to actively managed funds with this overview of passive investing (also called index or tracker funds).
Bogle lays out the ideas behind passive investing – where the fund automatically invests in most of the companies in a given index (like the businesses that make up the FTSE100) at a low cost. He also explains active investing, where a fund manager decides which individual shares to invest in, in the hope that they perform better than the index benchmark. He thinks that trying to beat the market is a zero-sum game, and after all the costs involved in active investing are deducted, it becomes a loser’s game. Bogle believes the simplest and most effective investment strategy in the long-term is passive investing. The book is split into digestible sections, without jargon and is ideal for those who want to understand more about passive investing (also our investment strategy at Moneybox).
4. “The intelligent investor: the definitive book on value investing”, by Benjamin Graham
Originally published in 1949, Benjamin Graham’s “The intelligent investor” is high on everyone’s “recommended investing books” list and rightly so. Even Warren Buffett says it’s “the best book on investing ever written.”
Aimed at the more active investor, Graham teaches you three crucial things; how to minimise irreversible losses, maximise sustainable gains and control the behaviour that prevents you from reaching your full potential.
It’s a handbook for more experienced investors, armed with key investment policies and concepts, laying out exactly what it takes to become successful in any investing environment.
5. “The essays of Warren Buffett: lessons for investors and managers”, by Lawrence A. Cunningham
Now in its fourth edition, Cunningham collates Warren Buffett’s letters to the shareholders of Berkshire Hathaway. Together, they provide an incredibly valuable education from the world’s most successful investor.
The essays cover a number of themes including – finance, investing, and the housing bubble – for those wanting a deeper understanding.
Not only does this collection provide meaningful insight into the world of investing – it’s an enjoyable read made even more so by Buffett’s humorous approach and amusing analogies.