Top 10 books that should be read by beginner investors

YEREVAN, February 14. /ARKA/. Below is the list of the top ten books most recommended by experts to introduce novice investors to the world of finance, raise the level of their financial literacy and increase their self-esteem.

1. The Random Walk Guide to Investing: Ten Rules for Financial Success, by Burton Malkiel:



The book is a practical guide for those who want to learn how to invest. American economist and Princeton University professor Burton Malkiel has formulated basic guidelines that will help you start investing with less risk.

"The advice in the book is simple and practical. There are no magic recipes in the world of investing simply because there are none. There is no shortcut to wealth. If someone promises to make you rich overnight, put your wallet away and plug your ears," writes Malkiel.

2. Ordinary Stocks and Extraordinary Returns, by Philip Fisher:



A collection of three works by American economist and investor Philip Fischer on how to generate investment returns over the long term with minimal risk.

"In common stocks, success depends on combining hard work with ingenuity and honesty. We can develop our gifts in any of these aspects, it just takes self-discipline and some effort," Fisher writes.

The author offers advice on building an investment portfolio and shares his own investment strategy, as well as how to choose the right time to buy and sell common stock.

3. Common Sense on Mutual Funds: New Imperatives for the Intelligent Investor, by John Bogle



The book is a simple investment strategy on how to buy a stake in a fund that manages a diversified portfolio of stocks and own it all the time.

"If you want to run a winning game, i.e., holding stocks of companies, and refuse to play a losing game, i.e., trying to outplay the market, start simple: use common sense, understand how the system works, and get rid of all unnecessary expenses," Bogle writes.

The author talks about the principles of choosing promising investment funds, portfolio diversification. Bogle proves that long-term investments are more profitable than short-term speculation.

4. The Investor's Manifesto, by William Bernstein



This is a kind of textbook on creating an investment portfolio, which will help the investor to avoid mistakes and not lose money.

"Don't forget the textbook definition: investing is deferring consumption in the present for the sake of consumption in the future," Bernstein writes.

The author also voices four rules that must be internalized before starting to build an investment portfolio.

5. Small Encyclopedia of the Trader, by Eric Nyman



The author gives an explanation of the financial market structure, rules of asset selection and risk calculation.

"Only a madman can talk about long-term success in regular trading, basing one’s opinion on an intuitive approach to market analysis," writes Nyman.

The author analyzes the current state of the capital market, talks about trading and the psychology of market participants.

6. Reminiscences of a Stock Operator, by Edwin Lefevre



This is the story of a stock operator whose prototype was Jesse Livermore, who became famous because he managed to make and lose millions of dollars several times.

"If I bought a stock on Smith's advice, I must sell that stock on his advice. I become dependent on him. What if he's on vacation just when it's time to sell? No, gentlemen, no one can make really big money on tips. I know from experience that no one can give me a tip or a series of tips that will bring me more money than my own insight," writes Lefevre.

The author explains the psychology of people who play the stock market.

7. The Visual Investor: How to Spot Market Trends, by John J. Murphy



The second edition of market analysis specialist John J. Murphy's best-selling book presents a variety of graphical analysis techniques and enables you to make astute investment decisions.

"Traders and investors have been taking a visual approach to investing for more than a century. Up until the last decade, visual analysis as a serious trading and investing method was largely the domain of specialists and professional traders. Most successful traders simply will not take up a trade without first looking at the charts. Even the Board of Governors of the Federal Reserve System now uses price charts," assures Murphy.

The author was one of the first to look at the opportunities for trading various financial instruments that the Internet offers.

8. How to play and win at a stock exchange, by Alexander Elder



The book describes three factors that influence a trader's success: psychology, technical analysis and capital control.

"People sometimes ask which of these three is the most important? My answer: it's like a stool with three legs. Try to remove any one, and then sit back and tell me which one is the most important."

The author advises investors not to make trades when they are feeling fear or anxiety, as this is fraught with the risk of failure.

9. Money Girl. A book about finances and common sense, by Anastasia Veselko



The book teaches how to competently make a budget, invest, optimize and analyze expenses. Veselko talks about finances in simple language, with examples that everyone can understand.

"How to keep the balance? How to learn how to maneuver between immediate desires and long-term plans? There is a solution, and you know it: budget planning and conscious consumption. Yes, yes, I know, your teeth are chattering from boredom. Just like the other indisputable truth: "You have to eat less to lose weight." Well, what can you do if that's the only thing that works - both with weight loss and money. When you take the financial wheel in your own hands, you will be much more comfortable and calm to live now and look into the future," writes Veselko.

The author shares life hacks that will help you save up for a new apartment and exciting travels.

10. The Psychology of Trading, by Brett Steenbarger



You need to focus not on the problem, but on the solution, Steenbarger says. The creator of "The Psychology of Trading" shares anonymously the stories of his clients who approached him with different problems.

"Trading is life in miniature." In trading, as in life, we pursue some kind of values. In both trading and life, we manage risk in the course of that pursuit, missing opportunities and taking losses. The way we pursue values and manage risk determines our personal and professional success," Steenbarger writes.

To motivate oneself to succeed, the author advises creating positive patterns in the event of good luck in the stock market, such as rewarding oneself and loved ones with new gadgets, clothes or trips to new places.

The material was prepared within the framework of a joint project "The Year of Investing in Oneself " by ARKA, AMI Novosti-Armenia news agencies and Freedom Broker Armenia.

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10:00 02/14/2024