10 Must-Read Books for Beginner Investors

Many beginner investors are like boats lost at sea – they don’t often know how to start getting themselves to shore, and which way is up or down and find themselves adrift in the stock market. Stock investing needn’t be such a mystery, and you don’t need to have an MBA to grasp the basics.

Beginner investors who educate themselves will have an advantage over those who merely want to make a quick buck by playing the market – these people just might as well have gone to the casino and bet on a round of roulette. We’ve picked the Top 10 must read books for all you fledgling investors, which can help serve as a compass and stop you from getting into a (financial) shipwreck.

The Intelligent Investor

Why not learn from the best of the best, Ben Graham, who taught investing master Warren Buffet? Any beginner investor should hold onto this book like the bible. Despite being first published way back in 1934, this book still teaches the fundamentals of value investing and decisions on the stock market. His former student calls it "the best investing book ever written" and many praise its use of language any everyday man or woman can understand. Many of its concepts are timeless, and Graham explains all concepts concretely, ultimately telling us, the readers, what an intelligent investor does to remain on top.

One Up on Wall Street

Peter Lynch teaches the beginner investor to use what they already know when playing the stock market. One must always “invest in what you like”, which is perhaps just as important as investing in things you understand. Best of all, Lynch separates the chapters into smaller portions which are easily comprehensible.

The Essays of Warren Buffet

There’s something intimate about reading someone’s essays and letters and third richest man in the world, Warren Buffet, is no exception. Professor Lawrence Cunningham arranges letters from Buffet into different sections, covering important topics like stock investing philosophy business valuation, stock options, etc., to give not only an insight into the way Buffet thinks, but giving valuable lessons in stock market investing.

Common Stocks and Uncommon Profits & Other Writings

What makes a great business? In his book, Philip Fisher points out the fifteen essential qualities every excellent business displays. This is another classic, written decades ago but still has solid, fundamental knowledge every beginner investor should know.

Little Book of Value Investing

This “little book” packs a wallop when it comes to information on investing in the stock market, particularly the use of value investing. Christopher Browne gives us what we need to know about value investing in 208 pages, filled with insight and wisdom, filled with anecdotes and metaphors to keep anyone from dozing off. The concepts discussed are detailed with useful advice, and any investor (new and seasoned) should have this on their bookshelf.

The Interpretation of Financial Statements

No matter how snazzy or glitzy a company may seem, it all boils down to numbers. Of course, most beginners will probably snooze off when reading financial statements, not just because they’re boring, but they also have no idea what to look for. Another gem by Benjamin Graham, newbie’s will learn about how to read financial statements. As long as companies run the same way they do in terms of financials, this book will come in very handy for years to come.

Little Book That Beats The Market

Another one from the “Little Book” series. What’s great about these books is that they don’t scare potential investors in the stock market. Joel Greenblatt’s "magic formula" is no form of wizardry – it’s a simple technique, using two elements - earnings yield and return on capital – to find the equation to a good (or bad) buy.

Five Rules of Successful Stock Investing

Pat Dorsey give greenhorns five basic rules that are easy to digest and remember when making their stock market picks. This is no gimmicky, get-rich quick scheme – his advice is sound, solid and practical. Yet, the book is filled with valuable tips and advice even the most seasoned veterans will find useful.

The New Buffettology

We all know who Warren Buffet is, but what we really want to know is what made him so rich. In the age of get-rich-quick, and the “now” generation, many young investors can learn a thing or two from Buffet’s value investing strategy – to take advantage of bearish markets and be in it for the long haul. Perhaps most interesting is looking at Buffet’s approach and detailed, step-by-step formula on how he determines which companies to invest in, and makes him profits, even when no one else does.