Lately, the financial markets have been choppy, giving aspiring investors some doubts about entering the market. But if there’s one thing the past has taught us, it’s that the markets recover.
Throughout history, every market downturn has ended in an upturn — think about the Wall Street crash of 1929 or the financial crisis of 2008 — and investors have managed to recover and get good returns on their investments. Well, maybe just those investors who know how to safeguard their finances against market changes.
The keywords here are “investors who know.” When it comes to investing, knowledge is power. You can’t guess your way around which assets to invest in or get into the markets without understanding your risk appetite. Each investment option comes with some risk, plus you have to know how concepts like portfolio diversification and hedging work.
Now is as good a time as any to invest in the financial markets, but first, you must invest in an essential element — your financial education. Here are seven books you just have to read to help you get started on your learning journey.
1. The Intelligent Investor
If you can only read one investment book, then let it be The Intelligent Investor.
There’s a reason why this is Warren Buffet’s favorite book — yes, Warren Buffet, one of the world’s most successful investors. There’s also the fact that Benjamin Graham, the author of this book, is called the ‘Godfather of value investing.’
The Intelligent Investor is arguably the best investment book of all time, with insights on errors every investor should avoid and lessons on developing long-term investment strategies. What’s especially nice about this book is that since it’s so old, it also gives a historical perspective that’s invaluable for seeing the realities of the market over time.
As Warren Buffet put it in the preface to the book’s fourth edition, "I read the first edition of this book early in 1950, when I was nineteen. I thought then that it was by far the best book about investing ever written. I still think it is."
2. The Little Book of Common Sense Investing: The Only Way to Guarantee Your Fair Share of Stock Market Returns
“Investing is all about common sense, and The Little Book of Common Sense Investing is a classic guide to getting smart about the market.
The book, written by legendary mutual fund pioneer and iconic investor, John C. Bogle, shows the importance of keeping costs to a minimum when investing, allowing you to keep more of the market’s returns in your pockets. The Little Book of Common Sense Investing also touches on bonds, exchange-traded funds (ETFs), and taxes.
3. How to Make Money in Stocks: A Winning System in Good Times and Bad
William J O’Neil’s How to Make Money in Stocks shows investors the secrets to building wealth in every type of market. It highlights proven techniques for picking stocks that maximize gains and minimize risks.
The processes and techniques shown in How to Make Money in Stocks have influenced generations of investors. Plus, given that volatility and downturns are a given in the market, this book is a great read.
4. Africans Investing in Africa
Africans Investing in Africa is an excellent resource for African investors. It not only shows how and where Africans invest across Africa, but it also explores the why behind the investment choices.
In addition, the book identifies the social, political, and economic issues that hinder or stimulate investment, making it easier for investors to put their money in the right place. You also get to see some examples of successful pan-African investors.
Africans Investing in Africa was written by Terrence McNamee, Wiebe Boer, and Mark Pearson, who are all based in Africa and have extensive experience in the African financial markets.
5. The Richest Man in Babylon
When you’re starting in the world of investing, you may find that some financial concepts are pretty hard to understand. George S. Clason’s The Richest Man in Babylon breaks down financial planning and personal wealth building into easy-to-read, digestible lessons that provide a good foundation for all the other knowledge you’ll get in the finance world.
Although the book doesn’t provide in-depth investing tactics or how-tos, it will give you valuable insight into every investor’s ultimate goal — building wealth. You’ll find that this book is a good place to start your investment journey; it has all the basics you need to start investing wisely and safeguarding your money.
6. The Little Book That Still Beats the Market
Joel Greenblatt’s The Little Book that Still Beats the Market (an updated version of The Little Book that Beats the Market), explains how aspiring investors can consistently beat market averages and generate good investment returns.
Sounds complicated? Don’t worry. The book breaks down the winning formula using simple math and terms that are easy to understand. You’ll see how and why keeping your investment strategy simple is a great way to make some significant gains over time.
7. Thinking Fast and Slow
To be a great investor, you must be aware of your tendencies and biases since they will affect your judgement and investment decisions.
In Thinking Fast and Slow, Nobel Prize winner and professor of behavioral and cognitive psychology, Daniel Kahneman, explains the natural biases that affect human judgement in everyday life and in investing. One of the things addressed by Daniel Kahneman is how our biases affect our financial plans and assessment of the markets.
The book offers practical insights into making good choices based on two systems:
- System 1, which is fast, emotional and instinctive; and
- System 2, which is slow, logical, and deliberative.
Thinking Fast and Slow will help you improve the performance of your investments and avoid costly mistakes in the market.
The time to start is now
The books highlighted here will help you go from a beginner investor to a smart investor who can make sound financial decisions. Couple that with some resources for beginner investors, and you’re well on your way to building your financial future.
And remember that once you have adequate knowledge, you must complement it with a platform that lets you invest safely and efficiently. If you’re looking to invest in stocks or crypto, Chipper has got you covered.
You can buy and sell Bitcoin or start building your stock portfolio in just a few taps, with as little as $1. Moreover, you can safely transfer and manage your money across the African continent and beyond without hassles. Your transactions are fast, easy, and secure.
Download the Chipper app on Google Play or App Store today and start investing the smart way.