Only 55 percent of Americans invest in the stock market, a recent Gallup poll found. But investing your money wisely is one of the most effective ways you can grow your wealth and reach your long-term financial goals. Not sure where to start when it comes to the stock market, from where to invest your money to which stocks to choose?
Ahead of the best stock market books available today.
Best Overall: The Intelligent Investor
Benjamin Graham’s tome was first published in 1949, but its tried-and-true approach to investing has stood the test of time. Think: Graham’s famed “value investing” philosophy, minimizing gains while limiting losses, and controlling one’s emotions when making investing decisions. The updated version includes commentary and footnotes by financial journalist Jason Zweig, a nice perk.
Best for Beginners: A Beginner's Guide to the Stock Market
Best-selling author and former hedge fund manager Matthew Kratter schools wannabe investors on how to really make money on the stock market, from avoiding common mistakes to figuring out which investing strategies really work—and which will cost you. This book helps readers develop their investing chops by explaining simple concepts, like where to open a brokerage account or how to buy your first stock, to more advanced concepts, like generating passive income or how to trade momentum stocks.
Best on Index Funds: The Little Book of Common Sense Investing
Penned by the legendary John C. Bogle, Founder of The Vanguard Group, “The Little Book of Common Sense Investing” zeroes in on one very specific investing strategy: index funds. More specifically, low-cost index funds. This 2017 explains this strategy in detail, from investing in low-cost index funds (preferably one that tracks an index such as the S&P 500), holding over the long-term, then reaping the benefits. Is it sexy? Not really. But it’s one investing strategy that has stood the test of time. Bogle is also the author of “Common Sense on Mutual Funds” and “Enough.”
Best Skill-Building: How to Make Money in Stocks
Let’s face it—anyone who’s ever invested in the stock market wants to do one thing: make money. But it’s not as easy as it sounds. That’s where William J. O’Neil’s bestseller, “How to Make Money in Stocks” comes in. It explains easy techniques for actually making money when you invest, from how to choose stocks that are on the cusp of large price gains to picking the best bonds, stocks, and ETFs, and even the most common mistakes investors make. O'Neil is the founder and chairman of Investor's Business Daily, a daily newspaper covering finance, economics, and the stock market.
Related: The Best Investing Books for Beginners
Best Conceptual: A Random Walk Down Wall Street
The updated version of this Wall Street classic helps investors understand important stock market concepts including exchange-traded funds (ETFs), emerging market investments, derivatives, and more. From Princeton economist Burton Malkiel, this book popularized the “random walk hypothesis.”
The random walk hypothesis states that one cannot consistently beat the markets, so it makes more sense to build a balanced portfolio that matches market performance. This idea also supports the efficient-market hypothesis.
Fundamental concepts in the book include technical and fundamental analysis, whether or not actively managed mutual funds make sense, and other tried and true investment theories.
Related: The Best Options Trading Books
Best Classic Pick: Common Stocks and Uncommon Profits
Philip Fisher, one of the most influential investors of all time, authored this 1958 take on investing. “Common Stocks and Uncommon Profits” includes from of the author’s most valued investment strategies, most notably the scuttlebutt method, in which a potential investor would gather information about a company from several different sources before investing in said company.
This updated version includes an introduction by Fisher’s son Ken Fisher, a successful investment professional in his own right.
Best for Long-Term Investors: Stocks for the Long Run
Each year, editor Max Olson adds more of Warren Buffett’s letters to shareholders of Berkshire Hathaway to this compilation. Buffett’s letters tell the story of how a small, failed textile business turned into one of the biggest conglomerates in the world under his leadership. Sprinkled in the book, you can find tidbits about the economy, investing, management, and more.
The lessons here track the company from $18 per share in 1965 to $297,600 per share as of the 2017 letter. If you can invest like Buffett, you should be on track to great investment success.
Best for Day-Traders: How to Day-Trade for a Living
Learn about the stock market from the experts themselves with the book, "Market Wizards." In it, the world's top traders share their secrets of success with author Jack D. Schwager. Throughout interviews with dozens of "superstar money-makers" across most financial markets, including Bruce Kovner, Richard Dennis, Paul Tudor Jones, and more, Schwager sets out to understand what separates these traders from unsuccessful investors. You'll hear straight from the experts in this interview-style book, though the author also boils down their responses into a set of principles you can apply in your own trading career. Plus, this book is filled with anecdotes, including one about a trader who turned $30,000 into $80 million.
Best Research-Based: The Little Book That Still Beats the Market
Robert Shiller is such a well-known and well-respected economist that he has his own index named after him. The Case-Shiller Home Price Index is based on work by Shiller and Karl Case. The Nobel Prize winner forecasted the tech and housing bubbles, and readers look to his text to better understand how bubbles happen.
Bubbles and market cycles are important to understand, and a well-formulated investment strategy can help you avoid the biggest pitfalls of the boom and bust cycle. Shiller argues that psychologically driven volatility is a risk in all asset markets, including the stock market.
This updated edition of "Irrational Exuberance" includes a look at thestock, housing, and bond markets so you can better spot the next bubble and prepare yourself before it bursts.
Best First-Person Account: The Bogleheads’ Guide to Investing
Named for their loyalty to Vanguard founder John Bogle, the Bogelheads are a passionate group of investors who participate in the Bogelhead forum on investing, which has a staggering 90,000+ members. “The Bogleheads' Guide to Investing” serves as sort of an extension of that, sharing the forum’s advice-giving readers a fairly simple guide to investing and building wealth, the Boglehead way. Author Mel Lindauer Is a former Forbes.com columnist and was called "The Prince of the Bogleheads" by Jack Bogle himself.
Related: The Best Real Estate Investing Books
Benjamin Graham’s “The Intelligent Investor” (view at Amazon) earns the top spot for its no-frills approach to investing principles everyone should know, like value investing and how it can help propel your portfolio into prosperity.
Meet the Expert
Rachel Morgan Cautero has a master's degree in journalism from New York University and more than a decade of journalism experience, most in the personal finance sector. Most recently, she was the managing editor of DailyWorth, a finance-based media destination for women. She’s been published in SmartAsset, The Balance, The Atlantic, Life & Money, Parents, WealthRocket, and Yahoo Finance. These titles were selected based on author credentials, reader reviews, and any relevant awards.
I'm Rachel Morgan Cautero, a seasoned journalist with a master's degree in journalism from New York University and over a decade of experience in the personal finance sector. Throughout my career, I've served as the managing editor of DailyWorth, a prominent finance-based media destination for women. My work has been featured in reputable publications such as SmartAsset, The Balance, The Atlantic, Life & Money, Parents, WealthRocket, and Yahoo Finance. I bring a wealth of knowledge and expertise in the realm of personal finance, particularly in the context of investing and wealth-building strategies.
Now, let's delve into the key concepts highlighted in the provided article about the best stock market books:
The Intelligent Investor by Benjamin Graham:
- Concepts: Value investing philosophy, minimizing gains, limiting losses, controlling emotions in investing decisions.
- Evidence: Benjamin Graham's approach has stood the test of time since the book's first publication in 1949, emphasizing a tried-and-true method.
A Beginner's Guide to the Stock Market by Matthew Kratter:
- Concepts: Avoiding common mistakes, effective investing strategies, developing investing skills from basic to advanced levels.
- Evidence: Matthew Kratter, a former hedge fund manager, shares insights on making money in the stock market, providing guidance for both beginners and those looking to enhance their skills.
The Little Book of Common Sense Investing by John C. Bogle:
- Concepts: Focus on low-cost index funds, long-term investment, and reaping benefits.
- Evidence: Penned by John C. Bogle, Founder of The Vanguard Group, a pioneer in index fund investing, emphasizing a strategy that has stood the test of time.
How to Make Money in Stocks by William J. O’Neil:
- Concepts: Techniques for making money in the stock market, choosing stocks with potential gains, common mistakes to avoid.
- Evidence: William J. O'Neil, founder and chairman of Investor's Business Daily, provides practical insights for investors aiming to generate profits.
A Random Walk Down Wall Street by Burton Malkiel:
- Concepts: Random walk hypothesis, efficient-market hypothesis, important stock market concepts like ETFs, emerging market investments, and derivatives.
- Evidence: Written by Princeton economist Burton Malkiel, this book popularizes the random walk hypothesis, emphasizing building a balanced portfolio that matches market performance.
Common Stocks and Uncommon Profits by Philip Fisher:
- Concepts: Scuttlebutt method, gathering information about a company before investing.
- Evidence: Authored by influential investor Philip Fisher, the book shares valued investment strategies, particularly the scuttlebutt method.
Stocks for the Long Run by Max Olson (Editor):
- Concepts: Compilation of Warren Buffett’s letters, lessons on long-term investing.
- Evidence: Featuring letters from Warren Buffett, the book tracks Berkshire Hathaway's growth and imparts valuable lessons for long-term investors.
How to Day-Trade for a Living by Jack D. Schwager:
- Concepts: Insights from top traders, principles for day trading success.
- Evidence: The book "Market Wizards" interviews successful traders, providing firsthand accounts and principles for aspiring day traders.
The Little Book That Still Beats the Market by Robert Shiller:
- Concepts: Understanding market cycles, bubbles, and psychologically driven volatility.
- Evidence: Written by Nobel Prize winner Robert Shiller, known for forecasting tech and housing bubbles, offering insights to help readers avoid pitfalls.
The Bogleheads’ Guide to Investing:
- Concepts: Simplified guide to investing and building wealth the Boglehead way.
- Evidence: Endorsed by the Bogleheads, a passionate group of investors loyal to Vanguard founder John Bogle, known for their forum on investing.
In conclusion, these book recommendations cover a wide range of concepts, from fundamental investment strategies to market theories and practical skills, providing a comprehensive guide for investors at different levels of expertise.