The best books on how to invest in the stock market successfully

Why this book?

The author, the father of index investing, outlines the most effective approach to building wealth in the long run: buy an exchange-traded fund with low acquisition and management costs and which tracks an index such as Dow Jones average or S&P 500 and hold it “forever”. 

The approach has stood the test of time.

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Why this book?

Malkiel’s highly readable book popularized the century-old notion that individual stock price movements are unpredictable, stating: “A blindfolded monkey throwing darts at a newspaper’s financial pages could select a portfolio that would do just as well as one carefully selected by experts.” To test Prof. Malkiel’s claim, the Wall Street Journal ran 142 overlapping six-month contests for a period of some 14 years using its journalists instead of monkeys to throw the darts. For 90 percent of the contests, the performance of the experts’ portfolios could not be distinguished from that of the dartboard portfolios!

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Why this book?

The author, the father of value investing, is seen as one of the greatest investment advisers. Warren Buffett and other successful investors are graduates of Graham’s Columbia U. investment course. First published in 1949, the advice outlined in the book has stood the test of time.

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Why this book?

The expanded third edition of this book was published in 2008. It contains the wisdom and wit arising from many years of the author’s investment experience. He and his partner Warren Buffett manage one of the largest investment operations in history.

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Why this book?

The greatly respected chief investment officer at Yale University for 36 years, David Swensen wrote: “Go back to basics. You can make money in stocks with a program of conservative investing through a successfully administered long-term portfolio. You should welcome the inevitable short-term declines by pursuing a “dollar cost averaging” strategy (investing the same number of dollars on the same exchange-traded fund that tracks the S&P 500 at the same time intervals). When you look at the results on an after-fee, after-tax basis, over reasonably long periods of time, there's almost no chance that you end up beating such a fund.” Swensen provides solid support for that claim throughout his book.

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