Top Ten Investment Books: A Revised List

 

Education is a crucial step toward financial success.

Where does one begin when trying to come up with the top ten investment books?  Here is my revised list, but be forewarned, this is not a list of books that focus on either fundamental analysis of stocks, nor is it a list of books explaining technical analysis.  In fact, the list below is the antithesis of stock picking.  My recommendation of the top ten investment books focus on index investing and a passive approach to portfolio management. When I use the term passive, I do not mean that in the tightest definition of that term.

Books

Here is my revised recommended list.

  1. Four Pillars of Investing – William J. Bernstein
  2. The Investor’s Manifesto – William J. Bernstein
  3. Think, Act, and Invest Like Warren Buffett* – Larry E. Swedroe
  4. The Little Book of Common Sense Investing – John C. Bogle
  5. The Elements of Investing* – Burton G. Malkiel and Charles D. Ellis
  6. The Intelligent Asset Allocator – William J. Bernstein
  7. The Power of Passive Investing* – Richard A. Ferri
  8. Asset Allocation – Roger C. Gibson
  9. Wise Investing Made Simpler* – Larry E. Swedroe
  10. Unconventional Success – David F. Swensen

It was not easy to pick which of Bogle’s books to recommend. His First 50 Years is definitely one to substitute for my number 4.  In this blog post I added several new books.  Numbers 3 and 5 take about two hours each to read and both include all the fundamentals of passive investing.

There are several ways to read these books. 1) Read them from start to finish as one reads most books. This looks like a daunting task if one is going to commit to reading all ten. 2) An alternative approach is to have, say the first seven or eight on your book shelf and you pick themes to read. For example, you might check the index of each and read all about asset allocation or rebalancing. Use them as reference books. If you take this approach, I highly recommend you read Bernstein’s second book, “Four Pillars” from start to finish so you have a sound base from which to begin developing your portfolio plan and eventually a strategy for portfolio management and tracking.  Another excellent starter is The Investor’s Manifesto.  It may be a little easier to read, so take that into consideration. Make the investment of time in a number of these books and it will reward you over the course of your investing life.

None of the above books go into sufficient detail about maintenance and monitoring portfolio and benchmark performance.  To fill in that gap take the time to examine and learn how to use the TLH Spreadsheet, available on this blog.

* New additions

 

 

Bullish Percent Indicators for 4 January 2013

Both sector and index databases made gains this last week with exception of the Dow Jones Industrial Average.  The overall gains are what one might expect after the market took off on January 2nd.  Below is the data for Platinum members.

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