Jump to content
Nigerian Investment Community
Esther.Dumbiri

The Top 10 ‘Must Read’ Books For Every Investor (Part 1)

Recommended Posts

 

images?q=tbn:ANd9GcTxIN6etqkK5MZgzIlaJRW

 

 

When it comes to learning about investment, there are several classics on investing that make for great reading.

 

The internet is surely one of the fastest, most up-to-date ways to make your way through the jungle of information out there, but if you're looking for a historical perspective on investing or a more detailed analysis of a certain topic, books will always come to your aid.

 

You can read books with sound financial advice, but if you lack the mind-set to truly build wealth, it will be difficult to achieve financial success. These books are mind-changers!

 

Here we give you a brief overview of these books to set you on the path to investing enlightenment.

 

1 Rich Dad, Poor Dad (2000) by Robert Kiyosaki

 

images?q=tbn:ANd9GcQz2FX_UcUiwuIibHf0-b5

This book has been around for a while now, but it’s quite possibly one of the best overviews on wealth building. It deals less with specific moneymaking strategies and more with the mind-set that is necessary to achieve great wealth.

 

Rather than focus on concrete steps for what people can do to fix their financial life, the book presents an alternative mind-set about money. According to Kiyosaki, the rich teach their children a fundamentally different view of the financial world.

 

Kiyosaki's view is that the poor and middle class work for money, but the rich work to learn. He stresses the importance of financial literacy, and presents financial independence as the ultimate goal in order to avoid the rat race of corporate America.

 

The book is built on his early life experience as a child of a well-educated, high income, but perpetually broke father, in comparison to the father of his best friend, who was poorly educated, but a multimillionaire.

 

Kiyosaki's message is simple, but it holds an important financial lesson that may motivate you to start investing: the poor make money by working for it, while the rich make money by having their assets work for them.

 

Kiyosaki advocates investments that produce periodic cash flow for the investor while providing upside in terms of equity value. Real estate investments and stocks that provide dividends are viewed favourably. Real assets add cash flow to your wallet.

 

For example, the book points out that working hard and even earning a high income are not enough to ensure financial success. Rather, the book emphasizes that the rich work smart and spend more intelligently.

 

2. The Intelligent Investor (1949) by Benjamin Graham

images?q=tbn:ANd9GcQjn788VDoCa_cORvmepvA

 

The Intelligent Investor is the grandfather of investment strategy books. This book has been hailed by Warren Buffett as the best investing book ever written.

 

Author Benjamin Graham is regarded as the father of the value investing. Graham delves into the history of the stock market, and informs the reader on conducting fundamental analysis on a stock through developing long-term investment strategies and avoiding significant errors.

 

He discusses various ways of managing your portfolio including both a positive and defensive approach. He then compares the stocks of several companies to illustrate his points.

 

The book stresses the importance of fundamental analysis and truly understanding your investments. By learning to analyse potential investments in depth, investors can learn how to spot under-priced stocks backed by robust companies which is determined through fundamental analysis.

 

The central tenet of the book is that a scientific approach should be used when directing your investments. Reading this book, you will learn to keep your emotions out of your investments, and develop a sceptical stance towards anything resembling the type of hype that so often gets the average investor into trouble.

 

The Intelligent Investor won't tell you how to pick stocks, but it does teach sound, time-tested principles that every investor can use.

 

3. Real Money (2005) by Jim Cramer

 

images?q=tbn:ANd9GcTBspa4kbHjkReyMziSHyJ

Popular TV financial analyst Jim Cramer's "Real Money" has continued to sell well since its 2005 debut. The book provides a basic play-by-play analysis of the basic techniques that Cramer advocates for buying stocks.

 

This is not the book for those who want set-it-and-forget-it investments. Cramer does NOT advocate "buy and hold" but rather "buy and homework" meaning that investors spend at least one hour per week analysing each position held.

 

While this ‘homework’ can quickly become a large time commitment, Cramer recommends that investors remain diversified. This may not be the right book for every investor, but if you are interested in the types of things that a hedge fund manager thinks about all day, or if you hold a diversified portfolio, you will enjoy this book.

 

To be continued…

Share this post


Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now

×