Forgive me for mentioning Christmas in September, but as with one's portfolio, it pays to do some planning. The end of the year is a time when many of us decide to take stock of the previous 12 months and reassess our goals for the next 12 and beyond. This year, why not give someone a helping hand in understanding the world of investment, organising their finances for the years to come and managing their portfolio by giving them one of these books?
1. The Intelligent Investor; Benjamin Graham
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 was originally published back in 1949 but has remained one of the most respected books on investing. The book 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.
2. The Essays of Warren Buffett: Lessons for Investors and Managers; Lawrence Cunningham
Legendary investor Warren Buffett, a former student of Benjamin Graham, is now one of the world's richest people thanks to his skill in investing in good businesses at low prices through his holding company Berkshire Hathaway. This book presents concentrated doses of investment wisdom from Buffett's annual letters to shareholders, in which the "Oracle of Omaha" not only shares his investment thinking but also does so in an honest, straight-talking and affable manner.
3. 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 recently met with Morningstar's Christine Benz to explain 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.
4. 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 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.
5. Wealth of Nations: A Selected Edition; Adam Smith, edited by Kathryn Sutherland
Though not strictly an investment book, "father of economics" Adam Smith's original Wealth of Nations, which he wrote in 1776 across five volumes, is an historically-significant classic. Unfortunately not many of us have the time (or necessarily the inclination after a long day's work) to invest in properly reading and understanding such a wealth of work. Thankfully, this abridged version provides a more manageable overview of Smith's most famous publication, incorporating, among others, chapters on the division of labour, mercantilism, systems of political economy and state-run monopolies, and would appeal to not only those interested in economics but also history and philosophy. Alternatively, take a deep breath and dive into the original full five volumes.
6. The Great Crash, 1929; John Kenneth Galbraith
Another economic history classic, this, but particularly pertinent given recent events. First published in 1954, this book describes in fascinating detail the events leading up to the Wall Street Crash of 1929 and argues that it was precipitated by rampant stock market speculation. Galbraith's account of how trust and rational behaviour go out the window when speculative episodes sweep through the investment world ring true today, 80 years on from the Great Crash, and will help warn all investors of the pitfalls of irrational behaviour.
7. The Five Rules for Successful Stock Investing: Morningstar's Guide to Building Wealth and Winning in the Market; Pat Dorsey
Another highly informative and straightforwardly written publication from Director of Equity Research Pat Dorsey, this book offers a complete investment guide for people who are serious about mastering stock strategies. It includes information on what you need to know about companies and economic sectors, why the information is important, and how to use it to make professional-level buy and sell decisions, backed up with examples and tried-and-true tools for selecting stocks.
8. Money of the Mind: Borrowing and Lending in America from the Civil War to Michael Milken; James Grant
Investors on both sides of the Atlantic will find this insightful and eccentric account of the history of North America's finance intriguing. Grant's book plots the journey from the turn of the century, when the average working American found it virtually impossible to secure a loan, to the 1980s, when it was virtually impossible to refuse one. It's a shame that the author didn't yet have the experiences of the past two years to include in his account but even without the knowledge of the collapse of the international banking system, Grant provides a passionate and in-depth look at the insecurity of financial markets.
9. 30 Minute Money Solutions: A Step-by-Step Guide to Rebuilding Your Finances; Christine Benz
Though not yet published, you can pre-order your copy of Morningstar Director of Personal Finance Christine Benz's book for delivery as soon as it's released. 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 specific to the US but the principles apply to investors around the globe and chapters on organising finances, getting started in investing, evaluating a retirement plan, monitoring your investments and others will certainly ring true for all.
10. The Financial Times Guide to Investing; Glen Arnold
This is one for investing beginners--or indeed those who want to brush up on the basics or take a step back and review the 'big picture'. Arnold's simple guide explains how financial markets operate, the process of investing and steps to building a portfolio, all illustrated with case studies and examples.
Don't forget that in addition to these publications, Morningstar.co.uk also has a wealth of information for all types and styles of investor in our Learning Centre--this is updated almost daily so be sure to check back for the latest investment lessons.
