Your Financial Bookshelf

In this book, I’ve advocated a lifelong learning approach to your financial education, and I would be remiss if I didn’t leave you a reading list going forward.  If you can read one book per month for one year, you will have completed my list and then you will know more about market investing than the vast majority of Americans.  Note that all of the ideas in these books are not ones that I agree with.  My goal is to provide you with a wide cross-section of strategies and ideas so you can make your own informed decisions about your financial future.


 

A Random Walk Down Wall Street: The Time-tested Strategy for Successful Investing (2016) by Burton G. Malkiel.

This newest edition is updated and expanding, but the professor’s ideas in this text were groundbreaking:  he was among the first people to advance the argument that you can’t beat the market, so you may as well invest in index funds and grow along with American businesses.

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One Up On Wall Street: How To Use What You Already Know To Make Money In The Market (2000) by Peter Lynch and John Rothchild.

Famed investor Peter Lynch suggests that the average person can achieve above-average returns by following a simple, common sense approach to stock picking.


The Millionaire Next Door (2010) by Thomas J. Stanley.

As you may have expected, rich people tend to think differently than poor people.  It is how they think differntly that will surprise you.


Jim Cramer’s Get Rich Carefully (2014) by James J. Cramer.

If you think the Efficient Market Hypothesis is just plain silly and that intelligent investors can pick stocks based on company fundamentals and thematic trends, then Jim Cramer is your kind of investor.  There is never a dull moment when Jim is narrating the market events of the day.  Jim has become more sensitive to the needs of the “home gamers” to make conservative investments of the years, a far cry from the edge of your seat tactics he used back during his hedge fund days.  Get Rich Carefully is his guide for more conservative investors focused on retirement.


The Intelligent Investor: The Definitive Book on Value Investing. (2006). by Benjamin Graham with Commentary by Warren E. Buffett.

If you want to follow the path of the worlds most successful investor, you’d better roll up your sleeves and sharpen your pencils.  Ben Graham’s (Mr. Buffett’s mentor) books are not light reading, but when compared to Security Analysis, the intelligent investor is far less intimidating.


Thinking, Fast and Slow (2013) by Daniel Kahneman.

If you think markets are rational, don’t be so sure:  Read this important treatise on how we think and how that effects markets in Professor Kahneman’s classic text.

 


Irrational Exuberance (2016) by Robert Shiller.

Conventional academic wisdom on how markets work dictates that prices are always correct and that market participant are rational actors acting in their own self-interest.  Professor Schiller turns that world on its head in his classic expose on bubbles and other byproducts of irrational investing decisions.


All About Asset Allocation:  The Easy Way to Get Started (2010) by Richard Ferri.

If you’ve seen the academic texts on asset allocation, the mathematics can be a bit overwhelming.  Richard Ferri makes the process more approachable with a plain English translation of those groundbreaking ideas.


Common Sense on Mutual Funds (2010) by John Bogle.

If all of this investing stuff seems terribly boring and you want a “set it and forget it” solution for your portfolio, then indexing may be the strategy for you.  John Bogle is the King of index investing and founded Vanguard to make it easy for us.  His little book shows you how indexing can make you wealthy, and you must leave your portfolio alone for this strategy to work.


The Five Mistakes Every Investor Makes and How to Avoid Them (2014) by Peter Mallouk.

The average person fails to earn their fair share of the market’s return.  This happens because people make common mistakes.  Forewarned is forearmed, and Peter Mallouk points out some common errors in investing that you can counteract.

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