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"A little learning is a dangerous thing;
Drink deep, or taste not the Pierian spring:
There shallow draughts intoxicate the brain,
And drinking largely sobers us again."
—— Alexander Pope (1688-1744), Essay on Criticism, 1711.
Here you will find books which will discuss investing issues broadly.
For a more detailed discussion of narrow topics, see our
Reading Room for Articles and Papers. If you have questions about any of the materials referenced
here, contact us — we love
talking about this stuff!
The books listed below should be on every serious investor's bookshelf. The books
are listed in alphabetical order by author.
 | Frank Armstrong,
Investment Strategies for the 21st Century, (1995). This is
an outstanding online book which is freely available to all. Click on the link above
to read it.
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| Gary Belsky and Thomas Gilovich, Why Smart People Make Big Money Mistakes And How To Correct Them: Lessons From The New Science Of Behavioral Economics , (Simon & Schuster, 1999).
This book describes the irrational biases we all occasionally have, which
conspire to cause us to do things which are adverse to our financial
well-being. Being aware of them will help us to overcome them.
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| William J. Bernstein,
The Four Pillars of Investing: Lessons for Building a Winning Portfolio
(McGraw-Hill, 2002). This is one of the best investing books ever
written, in our opinion. Interestingly, Dr. Bernstein's primary
occupation is that of a practicing Neurologist.
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| John C. Bogle,
Common Sense on Mutual Funds: New Imperatives for the Intelligent Investor
(John Wiley & Sons: 1999). John Bogle is the founder of The Vanguard
Group and one of the leading advocates for low-cost index investing
strategies.
Any other books by Bogle should also be a good read.
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| John C. Bogle,
The Little Book of Common Sense Investing: The Only Way to Guarantee Your Fair
Share of Stock Market Returns
(John Wiley & Sons: 2007). Largely an update to his Common Sense
book above.
Any other books by Bogle should also be a good read.
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| Charles D. Ellis,
Winning the Loser's Game (McGraw-Hill, 1998). This book is basically
an instruction manual for how to be a prudent consumer of asset
management services. Mr. Ellis is brutally honest and pulls no punches
in criticizing the excesses of the financial services industry. While
the book's topics are assembled in a somewhat haphazard order, he makes
his points effectively.
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| Burton G. Malkiel,
A Random Walk Down Wall Street: The Best Investment Advice for the New Century
(W.W. Norton & Company, 2007). Originally published in 1973 but updated
several times since, this is a true investing classic.
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| Larry E. Swedroe,
Rational Investing in Irrational Times: How to Avoid the Costly Mistakes Even
Smart People Make Today (Truman Talley Books, 2002). |
The books listed below are somewhat more sophisticated and might be
enjoyed by professionals and more sophisticated investors.
| Peter L. Bernstein,
Capital Ideas: The Improbable Origins of Modern Wall Street (The
Free Press: 1992). This is a lucidly written history of the major
innovations in modern investing principles. Mr. Bernstein tells the
stories so that most lay readers should be able to understand the ideas being
discussed.
Any other books by Peter Bernstein should also be a good read.
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| Peter L. Bernstein,
Capital Ideas
Evolving (Wiley: 2007). An update of his outstanding book above,
detailing advances since 1980.
Any other books by Peter Bernstein should also be a good read.
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| Peter L. Bernstein and Frank J. Fabozzi,
Streetwise: The Best of The Journal of Portfolio Management (Princeton
University Press: 1998). This compendium of the best papers from 25
years of the Journal of Portfolio Management should be on any serious
professional investor's bookshelf.
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| William J. Bernstein,
The Intelligent Asset Allocator:
How to Build Your Portfolio to Maximize Returns and Minimize Risk,
(McGraw-Hill, 2001). This is a well-written (though somewhat technical)
book. You can also read an archived copy of an earlier electronic
version of this book
here.
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| Paul Cootner,
The Random Character of Stock Market Prices (Risk Books, 2000). This book is
a true classic of financial economics. Originally published in 1964, it
contains, among other papers, the classic Theory of Speculation, Louis
Bachelier's amazing dissertation, written in 1900, which may be the earliest
work describing the Efficient Markets Theory.
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| Aswath Damodaran,
Investment Philosophies (John
Wiley & Sons, 2002). This book is freely available on-line
here. There are also lots of supporting materials (also available
free)
here. Dr. Damodaran is a professor at New York University's Stern
School of Business. He brings a refreshing objectivity to the issues.
His material is somewhat technical, but very well written.
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| Elroy Dimson, Paul Marsh, and Mike Staunton,
Triumph
of the Optimists: 101 Years of Global Investment Returns (Princeton
University Press, 2002). An outstanding book surveying most major themes
in investing and investigating supporting trends over the past 101 years in
all the major (and many less major) markets in the world.
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| Roger C. Gibson,
Asset Allocation: Balancing
Financial Risk (McGraw Hill, 2000). This book covers asset
allocation for the professional.
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| William Reichenstein and William Jennings,
Integrating Investments & the Tax Code (John Wiley & Sons, Inc., 2003).
This outstanding book authoritatively addresses many questions dealing with
the tax effects of investing.
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| Mark Rubinstein,
A History of the Theory of Investments (John Wiley & Sons, Inc.,
2006). This book might be though of as a much more thorough (and harder
to read) version of Peter Bernstein's "Capital Ideas" book above.
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| Frank Sortino and Stephen Satchell,
Managing Downside Risk in Financial Markets (Elsevier, 2003). An
excellent primer on the concept of Downside Risk.
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| Nassim Nicholas Taleb,
Fooled by Randomness: The Hidden Role of Chance in the Markets and in Life
(Texere, 2001). An excellent book about the relationship between chance
(i.e., luck) and results.
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| Nassim Nicholas Taleb,
The Black Swan: The Impact of the Highly Improbable (Random House,
2007). An excellent follow-on to Fooled by Randomness above. |
The books listed below are fairly new and should also be worthwhile.
| Frank Armstrong,
The Informed Investor: A Hype-Free Guide to Constructing a Sound Financial
Portfolio (Amacom, 2002). This is an updated, printed
version of Mr. Armstrong's (freely available)
online book.
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| Gregory Arthur Baer and Gary Gensler,
The Great Mutual Fund Trap (Random House, 2002). A
no-holds-barred exposé of the actively-managed mutual fund industry.
Here's a good review of the book.
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| Rick Ferri,
All About Index Funds (McGraw-Hill, 2002).
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| Rick Ferri,
All About
Asset Allocation (McGraw-Hill, 2005).
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| Taylor Larimore, Mel Lindauer, and Michael LeBoeuf,
The Bogleheads Guide to Investing (John Wiley & Sons, Inc., 2006).
A basic book on prudent investing principles. Written by and for
laypeople.
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| Dean LeBaron and Romesh Vaitilingam,
The Ultimate Investor: The
People and Ideas that Make Modern Investment. This is an
online book which is freely available to all. Click on the link above to
read it. |
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