Investing in the stock market is considered as one of the most effective ways to grow your personal wealth in order to reach your long-term financial goals. If you are not sure where to start when it comes to stock market investing, then you can read the best stock market books available in the market to start with.
There are many investing books available in market to help you in developing your investing skills.
Today, in this article, we have listed 5 best stock market investing books for young investors. By reading all these stock market investing books, beginners can develop their investing skills and to begin their journey in the stock market.
The Intelligent investor by Benjamin Graham
This classic stock market investing book written by Benjamin Graham is a must read for beginners. Mr. Graham is considered to be the father of value investing.
The intelligent investor written by Benjamin Graham was first published in 1949. The main investment approach outlined in this book is to determine the value of the operating company behind a stock.
In Intelligent investor, you will learn the fundamental principles to know when a stock is under priced compare to their inherent value. By buying under priced stocks at the right time you are sure to make profit. It also gives you real company’s examples to know what to look for in a stock. You have step by step guide to know what to look for and what to avoid.
He has explained how anyone can make money in the stock market by not taking big risks.
Benjamin Graham used the term “Mr Market” as an imaginary character which turns up every day to offer shares for buying and selling at different prices.
The Intelligent investor book has sold over 1 million copies world wide and earns its sport on every investor book shelf.
Beating the Street written by Peter Lynch
Beating the Street is written Peter Lynch. Peter lynch is one the great successful stock market investor and a mutual fund manager. In Beating the Street, Peter lynch has explained methods of deciding when and how to buy or sell a stock.
Everyone should know this basic thing before getting into stock market. He has also explained how an individual investor can do better than a professional Wall Street investor.
One up on Wall Street by Peter lynch
One up on Wall Street is another best investing book written by peter lynch. Peter lynch in One up on Wall Street, has said how a common man can use his common sense in stock market. He also teaches your how to use what you already know to make money.
Common Stock and Uncommon Profit by Philip Fisher
Common stock and uncommon profit is a well written investing book of Philip Fisher. In Common Stock and Uncommon Profit, he has explained how to invest in small portfolio of companies which has high growth potential and earn multiples on your investment. You will also learn some of the qualitative measure to select a company having future growth potentials.
Security Analysis by Benjamin Graham
Security Analysis is another classic investing book written by the author of The Intelligent investor. You will learn how to calculate value of a stock, evaluate financial statement of a company to decide and know whether the stock is under valued or over valued.
Above listed investing books will teach you how and when to pick a stock in market. Please remember that there isn’t just one book which will give you all the education to become a successful investor. By reading different books, you will learn all the basics and strategy to follow in stock market.
Here are key insights of the book Security Analysis;
- Margin of safety
- Intrinsic value approach
- Differentiating between investing and speculation: after a thorough analysis it will be clear that an investment is going to protect your principal and provide an adequate return. Anything which does not meet these criteria is speculation.
- Techniques for thorough financial analysis
- Understanding of the different types of securities and how to approach each
The essence of Security Analysis book is that a well chosen diversified portfolio of stocks, based on reasonable prices, can be a sound investment.
Very clearly Mr Graham has explained the difference between speculation and investment. He said an investment operation is one which upon thorough analysis, promises safety of principal and a satisfactory return. Operations not meeting these requirements are speculative.
He further said that a true investment must have two qualities; some degree of safety of principal and a satisfactory rate of return. If the spread between the prices of a stock and the intrinsic value of a company was large enough, the margin of safety concept should be used to select stocks.
Here is a list of few more stock market investing books to help you get started;
- A Beginner’s Guide to the Stock Market, by Matthew Kratter
- The Little Book of Common Sense Investing, by John C. Bogle, Founder of The Vanguard Group
- How to Make Money in Stocks, by William J. O’Neil
- A Random Walk Down Wall Street, by Burton Malkiel
- Market Wizards, by Jack D. Schwager
- The Bogleheads’ Guide to Investing, by Mel Lindauer
If you are looking for personal finance books then our next article on 5 best personal finance book might help you.
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