Beginner Investing Books - Foundation & Asset Allocation (2024)

FAQs

What book should I read to start investing? ›

1. The Only Investment Guide You'll Ever Need, by Andrew Tobias. If you are truly just starting out in your investing journey, this book is a great place to start. You'll learn tips on how to save and invest for your future and get excellent advice on what to avoid in the financial world.

This sort of five percent rule is a yardstick to help investors with diversification and risk management. Using this strategy, no more than 1/20th of an investor's portfolio would be tied to any single security. This protects against material losses should that single company perform poorly or become insolvent.

Warren Buffett once said, “The first rule of an investment is don't lose [money].

“New investors, along with having no experience, often have little knowledge about individual stocks and bonds and/or a smaller portfolio as they are starting out,” Cozad said. “To spread the risk out, mutual funds or ETFs might be the best option for a new investor.”

The Intelligent Investor by Benjamin Graham

This is the 'bible' of investing as far as stock market books go. One of the reasons may be attributed to the author, Benjamin Graham, mentor to Warren Buffett. The book begins by explanations of the basics of the stock market from the perception of value investors.

“The first rule of investment is don't lose. The second rule of investment is don't forget the first rule.” Buffett famously said the above in a television interview. He went on to explain that you don't need to be a genius in the investment business, but you do need what he deems a “stable” personality.

Look beyond the short-term

Trying to time the market increases your risk of buying or selling at the wrong time. By investing over a longer timeframe, you're more likely to benefit from trends that can support positive performance over a matter of years.

Understanding the Rule of 90

The Rule of 90 is a grim statistic that serves as a sobering reminder of the difficulty of trading. According to this rule, 90% of novice traders will experience significant losses within their first 90 days of trading, ultimately wiping out 90% of their initial capital.

The Rule of 72 is a simple way to determine how long an investment will take to double given a fixed annual rate of interest. Dividing 72 by the annual rate of return gives investors a rough estimate of how many years it will take for the initial investment to duplicate itself.

What is the golden rule of wealth? ›

1. Earn More Than Your Spend. Regardless of how much money you make, if you never save any of it, you will never build up any substantial amount of wealth. It is not how much you make but how much you keep that matters.

Maximize Employer Match

One of the golden rules of retirement savings is to contribute at least enough money to take full advantage of your employer match. For example, if your employer matches dollar for dollar your first 4% of 401(k) contributions, you should strive to put at least 4% into your 401(k).

The investment risk ladder identifies asset classes based on their relative riskiness, with cash being the most stable and alternative investments often being the most volatile. Sticking with index funds or exchange-traded funds (ETFs) that mirror the market is often the best path for a new investor.

The first step to successful investing is figuring out your goals and risk tolerance – either on your own or with the help of a financial professional.

There are some best personal finance books that you must read. These books will help you manage your savings and grow your money. You must read 'I will Teach You to be Rich' by Ramit Sethi, 'The Automatic Millionaire' by David Bach, and 'When She Makes More' by Farnoosh Torabi.

Stocks. For your long-term goals, stocks are considered one of the best investment options. You can buy stocks through ETFs or mutual funds, but you can also pick individual companies to invest in. You'll want to thoroughly research any stock before investing and be sure to diversify your holdings.