If you are uncertain, optimistic or nervous about investments right now, it may be a good time to do a little reading. Knowledge is really the best way to counterbalance emotions, which we know may be running high for some right now. Our advice: Check out what the masters have said. They’ve devoted their lives to understanding investing and captured it all in print. It turns out there is truly nothing new under the sun; their insights apply year-in and year-out.
We love original sources, so here’s our top seven books for you to read or re-read. If you don’t like to read, give them to a trusted source to tell you what’s in them.
Security Analysis by Benjamin Graham and David Dodd
Known as the bible of value investing, this is the book that Warren Buffet credits for his success. One of the hallmarks of value investing is patience, and at 800 pages you’ll need plenty of it.
Margin of Safety by Seth Klarman
The successor to Security Analysis. Seth Klarman is Boston’s own investment man of mystery. This book is infamous for its low supply and $1,000 price tag. However, a clever Google search might save you some money.
The Academic Approach
Against the Gods: A History of Risk by Peter Bernstein
What are all of the ways you can calculate risk? After you read this book, you will know just about all of them. From chaos theory to game theory, Pascal to Bernoulli, and gambling addicts to derivatives traders, this is probably the most comprehensive book about calculating risk. It’s a perfect depiction of man’s never-ending quest to wrestle uncertainty into submission via mathematics. (For related reading, see: Calculating Risk and Reward.)
Antifragile by Nassim Taleb
Before you trade any options, it would be prudent to read Nassim Taleb’s four-book series. Antifragile is one of my favorites as it explores the concept of antifragile investments—investments that do well specifically in chaotic times.
For Emotional Endurance
The Upside of Stress by Kelly McGonigal
Would you rather lose money on an investment or watch others gain while you sit out on the sidelines? Greed, regret, fear and other emotions can get in the way of otherwise rational and logical decisions. Not all stress is bad stress. (For related reading, see: How to Avoid Emotional Investing.)
Wealth in Families by Charlie Collier
Charlie says you should give your children just enough money to give them an advantage, but not enough to make them lazy. What goals, stories and lessons can you pass down to the next generation to give them a leg up beyond the financial inheritance? (For related reading, see: True Family Wealth Is Built With These Components.)
Classics: An Investor’s Anthology by Charles D. Ellis
A collection of articles and letters written by famous and wildly successful investors. If you like primary sources, this is a great collection of ideas and advice straight from the titans themselves.
(For more from this author, see: How to Stop Doing Nothing With Your Investments.)