Need Help to Understand Investing? Try these Expert-recommended Investment Books

From evolving global economies, to burgeoning technological advances, to shifting energy production – the investment landscape has become so complex that even the savviest investors may become baffled. And for those of us regular Janes and Joes who just want to plan for a comfortable retirement, the ins and outs of investing can seem downright overwhelming. Where should we turn for sound advice? We asked a group of financial experts to suggest some good personal finance books that provide a starting point to help regular folks navigate the rapidly-changing investment world.

Nick Foy, CFP of CAVU Wealth Advisors in Charlotte, NC recommends any of William J. Bernstein’s books – particularly The Four Pillars of Investing: Lessons for Building a Winning Portfolio. “

[Bernstein] gives great insight into our industry, pitfalls to avoid, and the history of markets in an easy-to-digest way,” says Foy. Another fundamental financial education guide can be found in The Elements of Investing by Burton G. Malkiel and Charles D. Ellis, according to Jamie Ebersole of Ebersole Financial in Wellesley, MA. “This book hones in on the key elements of investment success, namely: 1) save as much as you can, 2) use the power of compound interest to your advantage, 3) keep costs low and 4) keep it simple. Low-cost diversified portfolios win over the long term,” Ebersole suggests. Scott Stratton, CFPâ, CFA, founder of Good Life Wealth Management in Dallas, TX echoes Ebersole’s recommendation. “[The book] succinctly explains essential financial concepts like indexing, diversification, asset allocation, dollar cost averaging, and rebalancing,” says Stratton.

“I found that the average investor doesn’t know the difference between a stock, bond or mutual fund,” mentions David Goldman of The Laughing Stockbroker. Goldman believes humor is an excellent way to impart financial knowledge. He recommends his own book, The Laughing Stockbroker’s Beginners Guide to Investing available on his website. “The BASIC tenets of investing are simple, but each of us has our own spin when it comes to teaching them,” he says. For beginners Goldman also suggests Investing for Dummies, Seventh Edition by Eric Tyson. “Eric could explain quantum physics to Kim Kardashian and she’d understand,” Goldman quips.

More fundamental investment advice can be gleaned from The Little Book that Still Beats the Market by Joel Greenblatt, says Craig Siena, Senior Vice President of Sterne Agee in New York. Siena explains, “Greenblatt is a hedge fund manager and professor of finance at Columbia and explains value investing in a simple straightforward format. Everyone that reads [this book] walks away with a better understanding of how they can make money by following Joel’s simple rules.” One Up on Wall Street by Peter Lynch is the recommendation of Levar Haffoney with Fayohne Advisors, also in NYC. “It explains investing in a very fundamental sense,” Haffoney says. “It encourages investors to buy into companies that they are familiar with and purchase from in their daily lives. The book also explains, in simple language, how to analyze a company’s financial statements.”

Specific to investors nearing retirement age, Randy Kurtz from BetaFrontier, LLC likes the unique strategies outlined in The Value of Debt in Retirement by Thomas J. Anderson. “It discusses what most have never thought of: how to use strategic debt to increase liquidity, increase returns, and decrease taxes. Most people have no idea these strategies exist,” Kurtz mentions. Anderson’s easily readable book also “discusses some general investing topics, really hammering home the idea of a globally diversified, multi-asset class portfolio being able to reduce risks,” adds Kurtz. “I believe it really can make you money!” Another good book for Golden Agers is Asset Dedication by Stephen Huxley and J. Burns. “Asset allocation is the most important investment decision,” claims Jim Winkelmann of Blue Ocean Portfolios.

Finally, Donna Cox-Davies of D2 Solutions LLC says that when it comes to annuities there is one book that best explains all the products: The Annuity Stanifesto by Stan G. Haithcock. Cox-Davies describes Haithcock’s volume as “the go-to source for brutal annuity truth in an industry where too many sales pitches sound too good to be true.” She goes on to say, “Readers get the inside track on where and how annuities fit within a portfolio and [the book] provides unbiased insight into whether or not you even need an annuity.”

Suggested Reading

Readers of this post also reviewed Reading for Financial Success and participated in the NFEC’s financial literacy quiz.