Spending just a little time reading up on investing can make an enormous difference – after all, you stand to lose money in the long run if you’re not up to speed on the financial decisions you need to make. It’s good to be prepared – so, we asked our CEO Bob Parker to put together a list of his top five books on investment.

Practical advice

Some have gems of wisdom which you can apply practically, as well as some high-quality insight into how the markets work. Some are a little academic, but we’ll let that go on the basis that generally these writers are generous with the practical tips that spring from their theories.

There’s a strong emphasis on long-term investing and the need to ensure that your portfolio is diversified – sound advice, and we’d strongly agree with these key strategies here at Holborn Assets.

So invest in a little background reading and make sure you have the advantage the next time you quiz your IFA on the advice you’re being given.

#1: A Random Walk Down Wall Street by Burton Malkiel

Worth reading?

It’s a tough read at times, and dense, but it is packed with some fantastic insights into all kinds of investment opportunities, from a Princeton Emeritus Professor famous for his exposition of the theory of ‘market efficiency’.

The Big Idea

Markets are efficient and prices are random.

Reputation:

This book vies with Irrational Exuberance by Robert Shiller (see #2 on our list) for top spot as THE modern classic in investment theory and practice.

What people are saying on Amazon:

“As a beginner I learnt more about investing from this book than by any other available.”

#2: Irrational Exuberance by Robert Shiller

Worth reading?

Without a doubt, yes. High-minded and theoretical, this isn’t always an easy read – but there is also plenty of broad practical guidance in managing your own investments. Like Malkiel’s work, this isn’t a ‘how-to’ guide – it’s much more a series of observations from someone who really knows their subject.

The Big Idea

Speculation bubbles and crashes are driven by psychological behaviour rather than structural market forces.

Reputation:
The new preface of each edition has been an uncanny source of prophetic wisdom over the years – in the very first edition of 2000, Shiller predicted the tech boom and then, for the second edition of 2005, warned correctly that the contemporary boom in house prices presaged disaster. For this third edition, Shiller says rising prices right now in housing and equity is a sign that we’re heading for another crash.

What people are saying on Amazon:

“This book vaccinates you against the virus of credulity. We suggest a copy for every investor – dog-eared from frequent re-reading. It’s a wise investment.” 

#3: The Intelligent Investor by Benjamin Graham

Worth reading?
A real classic that remains very charming and accessible. Graham’s insights are also entirely applicable to today’s markets, and this relevance is supported by the extensive modern notes integrated into the latest edition.

The Big Idea

Trust common-sense and logical financial analysis.

Reputation:
Warren Buffet is a fan – and to many Graham is known as ‘the father of value investing’. Investment pundit Jason Zweig describes Graham as

“Not only one of the best investors who ever lived; he was also the greatest practical investment thinker of all time.” This book is widely held to contain the golden rules for practical, sober investment.

What people are saying on Amazon:

“Considered by many to be ‘The Bible’ when it comes to investing. After reading it it’s easy to understand why.”

#4: The Successful Investor Today by Larry Swedroe

Worth reading?

Hard truths, both theoretical and practical, are outlined clearly here in a very systematic way, making this a genuinely practical addition to your personal finance library.

The Big Idea

Passive investing – and, also how the Investment Establishment serves itself and not the consumer. Swedroe says you can’t beat the market but you CAN take advantage of its inbuilt efficiency if you’re prepared to be patient.

Reputation:

The author of four impassioned books, Swedroe has a reputation for being on the side of the small investor and showing it by making his ideas very simple and accessible.

What people are saying on Amazon:

“As a result of reading this book I stopped my investment adviser in their tracks and re-aligned my portfolio in accordance with Mr Swedroe’s ideas.”

#5: The Little Book of Common Sense Investing by John C Bogle

Worth reading?   

Definitely – this isn’t about wide-ranging market theories, but about why you should invest in indexes and how to do it.

The Big Idea

Cut out the costs of active management and let the market do the work.

Reputation

The author founded the world’s first index mutual fund in 1975 and is the man behind US investment giant The Vanguard Group. He also wrote the classic Common Sense on Mutual Funds: New Imperatives for the Intelligent Investor in 1999.

What people are saying on Amazon:

“Investors still believe in an Alice-in-Wonderland world which is all about special insights, market timing, leveraging and unfeasibly complex investment products or strategies. The author deals with all of this. He writes beautifully, and clearly. He is always forthright, and the text breathes commonsense and belief in every sentence.”