A Reading List for Individual Investors

I enjoy reading about investing, and, over the years, I have built up quite a large library of investing books. I thought I’d share a few of my favorites.

Readers may notice that the books I’ve listed cover several different investment philosophies. I’m an advocate of indexing, but I have included one “stock picking” classic (The Intelligent Investor). I’ve also included several books on behavioral finance. I think it is important for investors to be exposed to a variety of viewpoints, and I believe that each of these books contains some valuable wisdom.

I have labeled this list as “Part 1” because I plan to follow-up in a week or two with another list which focuses more on the analytics of investing. The “Part 2” list will include textbook and “how-to” book suggestions.

  1. Common Sense on Mutual Funds – John C. Bogle:  This is a must read for every investor.  The book makes an excellent case for indexing.  Regardless of your investing philosophy, you should read this book and think hard about Bogle’s arguments.
  2. Unconventional Success – David F. Swensen: Swensen is the manager of Yale University’s endowment.  This book is geared towards individual investors (he has another book aimed at institutional money managers), and it is entertaining and informative to read Swensen’s attacks on much of the money management industry.  Before I read this book, I was unaware of many of the sneaky methods which are used to hide fees within actively managed funds.
  3. A Random Walk Down Wall Street – Burton G. Malkiel: I haven’t read the latest edition of this book, but this is an investing classic.  The book advocates indexing and intelligent asset allocation.
  4. Stocks for the Long Run – Jeremy J. Siegel: Siegel is typically very optimistic about the future of equities, and, in this book, he makes his case using a tremendous amount of historical data.  This is another book where I haven’t read the latest edition.  I have read that he recommends overweighting dividend stocks in this edition. I’m not sure I would agree, but I’d love to read the argument and see the data.  Continue reading »