Investing is an alternative for many savers to obtain a return. However, due to ignorance, many do not resort to this option. The stock market is available to any investor –whether for those who have a lot or a little saved-. The only requirement is to use an authorized financial intermediary through which you place orders and operate.
The Stock Market is a market that serves as a meeting point between investors and companies that need financing. The most popular assets are stocks, but there are others such as ETFs, funds, or bonds. The ownership of those assets is what is traded. Its price in the market -it is called quote- varies and is determined based on the law of supply and demand. That is, the more demand there is, the more the price will rise. Or when there is little supply, it will also cost more to buy a share.
At first, all this information for a novice investor can be intimidating and difficult to start investing. However, a good starting point may be to learn from a book that explains financial concepts and how investments work. Since not everyone has the level, here are five books that can help beginning investors looking to get into the market.
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Value Investing For Dummies
For novice investors, there is nothing better than a practical guide that introduces the reader to the world of investing. Value Investing For Dummies -written by Peter J. Sander and Janet Haley- allows you to learn to invest with a global strategy. Value investing is buying shares of other companies that are trading below their intrinsic value and profiting from their long-term performance.
According to the book’s description, “it is a strategy that requires discipline and patience, but when done well, it guarantees great benefits.” Thanks to this book you will learn to assess the market, to decide when the price is right and to make your move.
The smart investor
Among the most repeated books to learn to invest in the stock market, The Intelligent Investor, written by Benjamin Graham, also stands out. His author is known as The Dean of Wall Street, considered the father of Value Investing and some experts describe his book as “the best investment book ever written.”
In this book Graham presents his philosophy, alerting investors on how to avoid strategy mistakes, while also describing how to develop a rational plan for buying stocks and increasing their value. The author points to the long term, “because it deals with a method aimed at investors and not at speculators: while the speculator only takes market trends into account, the investor obtains his benefits based on discipline and research,” according to Point to the description of the book.
One step ahead of Wall Street
Another bedside book for many investors is Staying Ahead of Wall Street. Its author is Peter Lynch, an American investor and manager of the Magellan fund in Fidelity Investments, the most profitable fund between 1977 and 1990 after achieving an average annual return of 29.2% -more than doubling the S&P 500-.
In the book – with more than a million copies sold worldwide – Lynch claims that non-professional investors can beat professionals simply by using the information at their fingertips, since investment opportunities are everywhere. The author “offers easy investment advice from the review of a company’s financial statement and teaches us to discover the numbers they really have when making the decision to invest,” according to the book’s description.
A Random Walk Down Wall Street: The Strategy for Successful Investing
A Random Walk on Wall Street is also an investment classic, written in 1973 by Burton Malkiel, a proponent of the efficient market hypothesis, according to which the prices of publicly traded securities reflect all information available on the market. His book is a guided tour of the complex world of the stock market and finance.
Warren Buffet’s Essays: Lessons for the Business World
And one of the most famous investors in the world and followed by millions of investors is Warren Buffet. Known as the Oracle of Omaha, for his ability to invest in the midst of market volatility, the book The Warren Buffet Essays collects his ideas. Specifically, the book shows a collection of letters from Warren Buffett to the shareholders of Berkshire Hathaway in which the fundamentals of good management are exposed, specifying that the role of a good director is to be at the service of the shareholders’ capital.
