If you are new to the stock market, growing your nest-egg predictably can be a challenging goal.
Should you be a stock-picker or invest in mutual funds and exchange-traded funds? Are stocks better than bonds or should your portfolio be divided between both asset classes?
And what about more exotic securities like futures, forex, and options? Should you ignore them altogether or speculate to generate extra income?
The road to finding a time-tested investing method can be harrowing so we rolled up our sleeves and researched the best stock market books for beginners to help you get up to speed faster.
Table of Contents
1 – Stock Market
Investing For Beginners
Of all the books on investing, Stock Market Investing For Beginners: Essentials to Start Investing Successfully, ranks among the very best.
All the common questions you may have about what to buy, when to buy, when to sell, and how to diversify your investments are covered in length, so you are left in no doubt what next steps to take.
Here’s a sample of what you will learn:
- How to pick winners using valuation techniques
- How to pick winners based on growth rates
- The different types of stocks you can invest in and why to choose them
- How to build a diversified portfolio
- What the “perfect” portfolio looks like
Perhaps the most valuable aspects of Stock Market Investing For Beginners: Essentials to Start Investing Successfully are the five strategies to pick winners and the advice on when to sell.
A golden rule of smart investing is to not put all your eggs in one basket but instead to diversify your investments and lower the risk of one bad investment hurting your entire portfolio. This book walks you step-by-step through the process of diversifying intelligently so you lower these risks.
The bottom line is if you are still puzzling over why you should invest in the stock market and want to know what smart and actionable steps to take, this is the best book to learn stock market basics.
2 – Learn To Earn:
A Beginner’s Guide to the
Basics of Investing and Business
It is hard to find a more distinguished author on the topic of stock market investing than Peter Lynch.
He earned his stripes on Wall Street as the manager of the Magellan Fund, which produced averaged annual returns just shy of 30% during the period from 1977 to 1990 when he was in charge.
Lynch took over the Magellan Fund when it had $18 million in assets and, by the time he left, it had $14 billion in assets.
He became famous as a proponent for buying what you know. If you use Facebook every day, maybe Facebook stock is worth considering.
In Learn to Earn: A Beginner’s Guide to the Basics of Investing and Business, Peter Lynch enlightens virtually anyone of high-school age or older about the basic principles of the stock market.
The failure to understand how markets work means that, when it comes time to retire, many are left with insufficient assets in their brokerage, 401(k) and IRA plans to pay for their golden years.
Yet Lynch argues that few people are unfamiliar with companies like Coca Cola that have paid solid dividends year after year for decades.
If you want an easy-to-read book that is jam-packed with valuable information and written by one of Wall Street’s most successful investors, few books match Learn to Earn by Peter Lynch.
3 – Stock Trading:
Invest and Trade in the
If you don’t know what you’re doing, stock market investing can be costly. By paying a financial advisor 1% of your invested assets and another 1% in mutual funds fees, in addition to transaction costs, you could lose out on big chunks of change over the long term.
Arguably one of the best beginner stock books, Calvin North’s Stock Trading: Invest and Trade in the Stock Market is designed to help you side-step investing pitfalls, like high fees, so you get to grips with the basics of investing and trading.
Some of the financial lessons include:
- Understanding the differences between stocks and other securities
- How to make money over the long-term and in the short-term
- Strategies to make money when the market is not performing well
- The different types of stocks and how to invest in them
- Investment methods of beginners and advanced traders
If your goal is to earn passive income from the stock market, Stock Trading by Calvin North ranks as one of the best investing books for beginners and experienced traders.
4 – Investing In Stock Market
Stock investing books for beginners may be a dime dozen but great books are hard to come by. Investing in Stock Market for Beginners: Understanding the Basics of How to Make Money with Stocks falls into the category of one of those great investing books.
You will learn about the seven key financial ratios designed to help you understand whether stocks are overvalued or undervalued.
Plus, you will discover bad investment behaviors, basic stock equations, technical analysis, and how to make the “right” investment.
The overarching idea of this book is to help you understand how to steer clear of investing traps that can cause losses by lack of knowledge and to help you identify comparatively safe investments in order to minimize risk.
5 – Rule #1: The Simple Strategy For
Investing In Only 15 Minutes Per Week
Phil Town’s Rule #1 isn’t just one of the best stock market books for beginners, it’s a classic that ranks among the all-time great investing reads.
What makes Rule #1: The Simple Strategy for Investing In Only 15 Minutes Per Week so compelling is that its author claims to have turned $1,000 into $1,000,000 in only 5 years.
He also shares a story that may resonate with many readers. He struggled to understand stock market cycles and explored whether he should simply hand over his money to a mutual fund money manager.
As Phil narrates his personal story from river guide to imagining a retirement of dining on cold cuts and watching TV instead of exotic adventures and fine wine, he shares the key lessons he learned along the way in an easy-to-understand manner.
Without a strong background in math and lacking much money, Phil describes how he was introduced to “The Rule”, a formula for stock-picking that requires no genius – only some investment research.
When you find a stock that meets the criteria set forth in “The Rule“, you can invest with confidence.
Thankfully these days, so many great screening tools exist that you don’t have to work nearly as hard as before to find great companies. And once you do, the idea is to buy stocks for $0.50 on the dollar over and over again in order to earn handsome profits over the long term.
The bottom line is if you want a clear-cut step-by-step formula for stock-picking, Phil Town’s Rule #1: The Simple Strategy for Investing In Only 15 Minutes Per Week is a must-read.
What are the best stock investing books for beginners that you have read? Share your top stock books below, we would love to hear from you.