Reading enriches financial security
This isn’t another article about how to make $1 million on some technology stock. Instead, it’s about the old adage that reading enriches your life, especially when it deals with investing for your future financial security.The problemIndividual investors are bombarded with an overwhelming amount of advice on how they should invest their hard-earned money. This advice comes in as the printed word, daily commentary from a multitude of talking heads on television and all kinds of advice from a variety of investment professionals. If you’re confused and wondering how to process this mass of information, don’t feel like the Lone Ranger. Unfortunately, this circumstance describes the vast majority of the investing public.The solutionSo here’s another article to tell you what to do! Don’t be frightened. I’m going to simplify your life with an easy-to-understand, practical recommendation that could be worth thousands of dollars to you. Reading just one of the seven books recommended below will give you the wherewithal and peace of mind to make informed investment decisions. Read all seven, and watch out Warren Buffett!The first investment any investor should make is in know-how. Becoming familiar with the financial assets you need to own and how to use them to achieve an investment objective. Remember, all you need to achieve is a level of investment literacy that enables you to develop and maintain a given investment position, be it $50,000 in mutual funds – fairly simple – or $500,000 directly in stocks and bonds – which is far more complex. A basic library for individual investorsI’ve been told there are more than 80,000 personal finance and investment books in print. My guess is that only about 100 of these are worth reading. I’ve selected just seven of these books, all of which are in the Vail and Avon Libraries, that I think best meet the needs of individual investors. I’ve grouped them below according to their level of sophistication:– “Investing for the Financially Challenged,” Walter Updegrave.– “Index Funds: Strategies for Investment Success,” Will McClatchy.Both of these books are easy reads. The Updegrave book is comprehensive and written with a delightful sense of humor. Will McClatchy also covers a wide range of key investment issues for individuals and then provides a definitive treatment on the role of index mutual fund investing.– “Bogle on Mutual Funds,” John Bogle.– “The Four Pillars of Investing,” William Bernstein.Bogle is the ex-Chairman and founder of The Vanguard Group. If you are a mutual fund investor, this is the single most important text for you to read. Bill Bernstein has carved out a reputation as one of the most brutally honest, yet consistently accurate voices in the current investment environment. If you’re at, or getting close to, an intermediate level of investing, both of these books are appropriate.– “A Random Walk Down Wall Street,” Burton Malkiel.– “Stocks for the Long Run,” Jeremy Siegel.The Malkiel and Siegel books are investment classics. These highly acclaimed works are for the more experienced investor and will provide an abundance of investing insights.– “The Intelligent Investor,” Benjamin Graham (newly Revised Edition with Jason Zweig commentary).In the words of Warren Buffet, a Ben Graham protégé, this book is “by far the best book on investing ever written.” Authored in 1949, the book has been, and still is today, the basic text used in business school curriculum on investing. I strongly urge individual investors of all levels of experience to start your “reading engines” and begin absorbing the know-how that will surely translate into smart investment decisions.
Richard Loth is Managing Principal of Mentor Investing, and an independent registered investment adviser. He can be reached by e-mailing to email@example.com or calling (970) 827-5591.