Previously, my colleague Sudhan had recommended five investment books for new investors. Here are three additional books that I think would also help new investors to navigate their way through the rough seas of investing.
Value Investing for Dummies by Janet Haley and Peter Sander
This book is into its second edition now. Although the title may turn some people off, I have to say that the book has a ton of good information on not just the right mindset to have for value investing, but also plenty of basic accounting concepts to help the new investor.
Accounting is one of the essential skills an investor should have, and this book covers most of the accounting-areas which are important, and also provides pertinent examples to boot. I find Value Investing for Dummies to be a book which one can use as a good reference and a useful resource when analyzing financial statements, as it explains jargon in an easy-to-understand and approachable manner.
Winning Investment Habits of Warren Buffett and George Soros by Mark Tier
When it comes to investing, it pays to learn from the best! And it’s hard to top Warren Buffett and George Soros when it comes to investing achievements. Mark Tier has skilfully studied both men’s investment habits and distilled his findings into this book.
The surprising thing here is that most people would think that Buffett and Soros’ methods are as different as night and day, as the former is a patient long-term investor while the latter is an opportunistic trader. But Tier manages to wring out their common mental habits and practices by delving into the backgrounds of each investor and linking these backgrounds to their psychology. The common habits and practices of Buffett and Soros are summarized by chapter within the book, and it is written in an easy, flowing style, making it a page-turner.
Winning Investment Habits of Warren Buffett and George Soros is the only investing book I know which mentions these two very different investors, and yet manages to find common ground between them, so it’s definitely a book worth reading!
The Seven Deadly Sins of Investing by Maury Fertig
Moving on to the psychology of investing and behavioural finance, Fertig has written a very good book on just that! Most people would have heard of the seven deadly sins as it pertains to Christian teachings, but Fertig cleverly makes use of each of the sins to illustrate how prevalent they are in investing.
At the start of each chapter, he first defines what each sin is (example envy, sloth, avarice) and then proceeds to describe how the sin manifests in investing. He then goes on to tell investors how to guard against each sin, by first recognizing it in ourselves, and then proceeding to take specific actions to counteract their harmful and pervasive effects.
The Seven Deadly Sins of Investing is a very engaging book and I am sure new investors would identify each sin within themselves and this should spur them to take additional care with their emotions.
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