Essential Christmas Reading for Investors

The benefits of swotting up on investing last for life, not just for Christmas—these 10 books will excite both newbies and seasoned investors

Holly Cook 20 December, 2013 | 10:54AM

The new year is a popular time for savers to review their finances and investments, so why not give yourself and your loved ones a head start with some essential reading from some of the world’s most renowned investors.

Here we list a mixture of classics and new releases that will help both new and seasoned investors ensure they’re investing in a solid foundation of knowledge.

The Intelligent Investor
Benjamin Graham

We start at the beginning with a classic originally published in 1949 that has remained one of the most respected books on investing. Heralded by Warren Buffett as "the best investing book ever written," this influential book about value investing is a comprehensive, straightforward and essential read for any investor—young or old, new or seasoned—and is one that you will refer back to again and again. Famed investor and "father of security analysis" Benjamin Graham's bestseller not only provides an in-depth understanding of value investing but also guides investors to develop long-term strategies that will serve them in the present and the distant future. The latest edition also includes new chapter updates from respected financial journalist Jason Zweig, whose own publication features on our list.

The DIY Investor
Andy Bell

Andy Bell’s guide to independent and successful investing provides readers with valuable lessons in constructing a portfolio, investing in a tax-efficient manner, focusing on low-cost investments and executing deals, all without having to pay for professional help. The founder of investment platform AJ Bell has written a book that will help first-time investors take the crucial initial steps towards taking control of their financial future, and will assist more seasoned players in the market with ideas and tips on how to develop their investing style and strategy. 

Shares Made Simple: A Beginner’s Guide to the Stock Market
Rodney Hobson

Morningstar columnist and veteran investor Rodney Hobson has written a series of books aimed at equipping beginners with a clear and solid understanding of how company shares operate within the stock market and how to find reliable stocks for your long-term portfolio. Hobson sets out to ensure that readers will no longer feel ostracised by the finance pages of their newspaper, will be able to confidently decipher company reports and, above all, can research and pick shares that suit their needs. “I cannot pick your shares for you but I can tell you what to look for and how to look for it,” Hobson says of the book. “Above all, I will endeavour to provide a level playing field in a world still dominated by professional players as you seek your share of the nation's wealth,” he adds.

Investing Demystified: How to Invest without Speculation and Sleepless Nights
Lars Kroijer

Another newcomer to the list and suitable for both beginners and more seasoned investors, former hedge-fund manager Lars Kroijer’s “Investing Demystified” clearly sets out some of the most common investing mistakes and his principles for ensuring that private investors can comfortably achieve their goals without succumbing to crippling fees, or being washed up in the daily noise of the stock market. Written with his own mother in mind, Kroijer’s style is accessible and jargon-free and his strategy advocates focusing on your own financial goals rather than beating the market. Kroijer believes the average investor cannot have an ‘edge’ on the professionals but can still be successful by focusing on buying a few good passive investments that provide exposure to a broad range of asset classes and geographies.

You Say Tomayto…
Alastair Mundy

If you disagree with Kroijer and believe you can find an ‘edge’, Investec’s well-known contrarian investor can show you how. Mundy’s light-hearted yet hugely informative book takes you through eight enjoyable chapters of advice on how to find unloved stocks that have the potential to pay you handsomely. From the psychological strength needed to go against the crowd to practical tips on how to quiz a company’s annual reports and management, Mundy provides the stock investor with a wealth of actionable information in his own inimitable style.

Your Money and Your Brain: How the New Science of Neuroeconomics Can Help Make You Rich
Jason Zweig

Wall Street Journal columnist and author Jason Zweig has often featured on Morningstar explaining how behavioural finance studies can help the investor understand the thought processes that go on when making investment decisions, and therefore how to try to tune out the noise and ensure that those decisions made are good ones. In this book, Zweig explains the recent findings of 'neuroeconomics' in relation to investing and offers tips for both the newcomer and the advanced investor on how to avoid making investment mistakes.

The Little Book that Builds Wealth: The Knock-out Formula for Finding Great Investments
Pat Dorsey

If you can identify companies with moats and purchase their shares at reasonable prices, you’ll greatly improve your odds of doing well in the stock market. This book by Morningstar's former Director of Equity Research, Pat Dorsey, explains in an easy-to-read style how to find companies with an in-built competitive advantage and how to use value investing principles and economic moats to your investing advantage.

30 Minute Money Solutions: A Step-by-Step Guide to Rebuilding Your Finances
Christine Benz

Morningstar Director of Personal Finance Christine Benz breaks down the daunting goal of getting your financial house in order into manageable steps and highlights the importance of getting the big-picture decisions right and tuning out the day-to-day gyrations of the market. The book describes what you need to know to create a simple, straightforward financial plan, and how to stick with it through challenging market conditions. Some of the areas discussed are more relevant to US investors but the same principles apply globally and chapters on organising finances, getting started in investing, evaluating a retirement plan and monitoring your investments will certainly ring true for all.

All About Asset Allocation
Richard A. Ferri

Asset allocation, or the percentages of stocks, bonds, cash, and other investments in your portfolio, is a very important topic that doesn't always get the attention that it deserves. Several of the above books touch on asset allocation, but this book goes into more depth on this important topic in a way that's accessible to investors who are just starting out. Ferri includes a big-picture overview of asset allocation and why it matters, discussions of the various asset types (U.S. stocks, foreign stocks, bonds, real estate, and alternative investments), and a clear discussion of how to build and maintain a portfolio. For somewhat more advanced (but still very readable) coverage of the same general topic, check out William Bernstein's The Intelligent Asset Allocator and The Four Pillars of Investing

Wealth and Power: China’s Long March to the Twenty-First Century
Orville Schell and John Delury

Not strictly a book about investing but one what that will be of huge interest to those looking to understand the engine behind world economic growth and a region that looks set to remain a hot topic for years to come, Wealth and Power will appeal to historians and international investors alike. Schell and Delury’s carefully unpackage the events and trends that have led to China’s dynamic growth, hyper-development and wealth creation. Investing in companies that are positioned to tap into the fast-growing, consumption-focused middle class of China has been a key element of many professional investors’ global strategies in recent years and this analysis of China will help prospective investors better understand China today and the future that this country is shaping for the rest of the world.

The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

About Author

Holly Cook

Holly Cook  is Managing Editor of Morningstar.co.uk