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Best Stock Market Books for 2020
Best stock market books for 2020 is a list of the top books about trading and investing. There are hundreds of books written about the stock market on every topic, such as fundamental analysis, technical analysis, trading physiology. Following are the top 10 stock market books of all time for both beginners and experienced investors.
1. How to Make Money in Stocks
How to Make Money in Stocks is the best overall books about the stock market and investing in general. It was written by William O'Neil, the legendary trader and founder of Investor's Business Daily.
This is the book that made me went from a losing trader to a winning investor. I learn to buy trending and breakout stocks instead of looking for bargains. The book presents a CANSLIM system that the author uses to find explosive stocks that utilizes both fundamental and technical analysis. It is a must read book whether you are just starting out or have years of experience in trading.
2. The Intelligent Investor
The Intelligent Investor is a classic book in value investing and is known as the bible for the stock market. The book was written by Benjamin Graham, and first published in 1949. The world's most known and successful investor of all time, Warren Buffett, attribute his success to this book and his investing teacher Benjamin Graham.
The Intelligent Investor is about investing a stock for the long term. When you buy a stock, you buy the underlying business instead of its stock price. You will learn how to analyze and research the stock market for bargains and growth stocks. You will also learn how to invest in companies that pay dividends and avoid risky investments such as IPOs.
3. One Up On Wall Street
One Up On Wall Street is the 3rd book that I would recommend. Written by Peter Lynch, the mutual-fund manager who ran the Fidelity Investments between 1977 and 1990 which averaged 29.2% in annual returns.
In this book, Peter Lynch teaches you how to look for stocks that has the potential to become household names before they take off. Opportunities are everywhere from the supermarket to the workplace, and the key is to buy the good ones before the big institutional do.
You will learn his strategies on how to invest in cyclical, turnaround, and fast-growing companies.
4. The Essays of Warren Buffett
The Essays of Warren Buffett is a collection of letters that Warren Buffett sent to Berkshire Hathaway shareholders detailing his investing philosophies for the past 25 years. Warren Buffett, the world's most famous investor of all time, accumulated a net worth over 70 billion from investing in the stock market.
In this book, you will learn the investing principles for long term success, and the approach that Warren Buffett uses for buying stocks and companies. You will gain the insights on how he grow Berkshire Hathaway from a small firm to a massive holding company with a market cap over 450 billion.
5. Technical Analysis of the Financial Markets
If you are looking to trade short term instead of investing for the long term, Technical Analysis of the Financial Markets is a book that you should have on your shelf. Author John J. Murphy discusses all types of stock chart patterns and technical analysis. Best of all, this book is beginner friendly, it does not required any prior trading experiences to understand the concepts of stock trading.
The book is a comprehensive guide that covers trading methods, money management, time cycles, stock market indicators and chart patterns. Traders will learn how to find stocks to trade based on the signals of these stock patterns and optimize their entry and exit strategies. If I had to read only one book on the topic of technical analysis, it would be this one.
6. Trading in the Zone
Trading in the Zone written by Mark Douglas, is one of the few books that focus exclusively on the topic of trading psychology. For short term day traders and swing traders, this is a book that you shouldn't miss. The book teaches you why relying solely on technical analysis and chart patterns will not make you rich. As humans, we have fear and greed. These motions are the primary reason why some traders make it while most fail in the world of stock trading.
Through this book, you will learn how to manage and control your emotions. You will also learn how to develop the discipline and a winning attitude towards trading.
7. The Little Book That Beats the Market
The Little Book That Beats the Market is another great book on long term value investing. The book was originally published in 2005 and updated in 2010. In this book, author Joel Greenblatt shows you how to find above average companies at below average prices using his time tested formula.
The book is easy to read and understand even for beginners. You will learn the basic principles of successful stock market investing, and learn how to find great stocks at bargain prices. Following his "magic formula", you will be able to develop a long term investing strategy that will beat the bull and bear markets.
8. The Little Book of Common Sense Investing
The Little Book of Common Sense Investing is written by John C. Bogle, the founder of The Vanguard Group - an investment firm with over $5 trillion in assets under management.
In this book, the author introduces you to the concept of low cost index funds which is one of the most effective investment strategy for building wealth over the long term. By invest in index funds, you can build a diversify portfolio to achieve your financial goals without the risks of owning individual stocks.
Most people lose money in the stock market by over trading, while index investors use the simplest and most effective investment strategy which is to buy and hold.
9. Reminiscences of a Stock Operator
Reminiscences of a Stock Operator is a timeless book about Jesse Livermore, one of the greatest traders who ever lived. The book was written by Edwin Lefevre and was first published in 1923.
Jesse Livermore traded the stock and commodities in the early 1900s and have won and lost millions of dollars. At his peak, he amassed approximately $100 million from trading, which is over 1 billion dollars in today's money. This book details the trading style and disciplines of Jesse Livermore on stock trading and speculating. The book is still popular 100 years later and is a must read for traders.
10. Market Wizards
Unlike the other books on this list where one learns either an approach to long term investing or short term trading, Market Wizards is a book about the mindsets and mental attitude of great traders.
In this book, author Jack D. Schwager interviewed dozens of top traders across most financial markets. The traders talk about their approach to trading and why they are successful in their own words. There was one trader who turned $30,000 into $80 million, a hedge fund who average 30 percent annual returns for twenty one years, and a bond trader who parlayed $25,000 into $2 billion in a single day.
You may not be able to apply these strategies to your own trading in today's market, but you will learn the essential formula that made these top traders successful. The secret is solid methodology plus proper mental attitude equals trading success.
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