If you are looking for truly memorable, insightful reading that can provide you with both education about money, markets, and investing, as well as practical and empirically tested knowledge and information, then this post is for you. These are some of my favorite books and they offer true wisdom – concepts, principles, and lessons learnt from real market events.

The content of this post does not constitute financial advice. It is intended for educational purposes only. This website is not affiliated with any of the authors or publishers of these books and is not sponsored by them.

recommendations for beginners to intermediates

Investment knowledge comes with a lot of jargon, and a lot of interlinkages with other economic and financial disciplines, with both simpler and more complex concepts, formulas, and models. It can be overwhelming and for the layperson without sufficient prior experience or background in this subject matter, all of this can be extremely confusing – to the point when one does not know where to start at all. So I will start my recommendations list with books for absolute beginners and then add more in increasing order of complexity.

1. The Simple Path to Wealth, by JL Collins

For absolute beginners, this is a great introductory book, written in an accessible way and introducing some of the core concepts of investing, portfolio construction, and diversification, as well as other important personal finance goals such as dealing with debt, optimizing spending, and saving. It provides a particularly strong focus on the stock market and its behavior and it looks at the role of bonds and index funds in individual portfolios.

The book does have relatable content in that it manages to link investment decisions to the author’s own life path and choices. And while it does look at some basic strategies that can be useful to beginners, one major drawback I would highlight is that the author proposes predominantly Vanguard products which are explicitly mentioned. And of course, the focus is clearly on the US perspective (for a more German- or European-oriented perspective, I have another recommendation below).

2. Just Keep Buying, by Nick Maggiuli

What I like about this book, is that in addition to providing general knowledge and advice on core saving, spending, and investing principles, the author has provided a number of empirical data sources and research that showcase why and how they work. The book answers the core questions a beginner would be interested in and it brings evidence to support what it preaches. But keep in mind the focus is still heavily on the US.

While it does provide a great guide to personal finance from a reputable practitioner, this book does cover blog posts on the same topic already available from the author, and existing research available for free. What is also clearly missing, is at least a dedicated chapter on global investment funds (incl. index funds) and global diversification strategies.

3. The Bogleheads’ Guide to Investing, by Mel Lindauer, Taylor Larimore, Michael LeBoeuf

This book is also a great introduction to investing, and it is part of a great series covering several aspects of personal finance. It clearly makes the case that active investing has multiple problems that make it to some extent inferior for the average individual investor, while the simplicity of passive investing makes that approach more accessible. It covers a lot of the absolutely necessary steps in an investment process, and it discusses various asset allocation approaches and asset classes.

The book looks into the basics of other topics, such as taxation, investment costs, and focusing on the signal rather than the noise when making investment decisions. It also provides a useful overview of various financial practitioners and advisors, which aims to eliminate confusion when choosing one.

4. A Random Walk Down Wall Street, by Burton Malkiel

This book is a classic and has been updated multiple times throughout the years to cover finance and investing topics relevant to the most recently observed market environments and policy regimes. It is not an introductory book but is certainly recommended for those who already have some basic knowledge and understanding of the markets. It looks into more topics than other books, such as smart beta and factor investing, behavioral finance, market bubbles, and tax-loss harvesting.

But it also covers an overview of the usefulness of the most important tools professional investors use – such as fundamental and technical analysis. These are told in ways that can be easily understood by the layperson. And the lessons Malkiel provides are timeless – he also makes a very compelling case why active investing is a losing game. He does not give specific recommendations but he does outline how asset allocation and diversification can be used to build a portfolio depending on age and risk tolerance.

5. The Intelligent Investor, by Benjamin Graham

Another classic – and in my view – a must-read for everyone. Benjamin Graham is widely known as the “father of value investing” and his books have become the definitive texts on this topic in finance. They are so valuable because they lay out principles for achieving good enough investment performance by buying and holding a representative portfolio, and by looking at stocks as businesses instead of tools for speculation.

It is of course no coincidence that Warren Buffett picked this book as the greatest investment book of all time. It covers asset allocation principles, stock and bond investments, and what metrics to use to analyze a company or to determine whether it is under/overvalued or whether it has good earnings growth potential. Graham also looks at the effects of psychology on investor behavior which is quite important to avoid costly mistakes and large losses.

6. Stocks for the Long Run, by Jeremy J. Siegel

If you ever wondered whether there is a book that summarizes virtually all key aspects, concepts, and history of the stock market, this one comes very close. You will be able to understand why stocks have been the most important wealth-building machine so far, how they function, and how they managed to go through major periods of turmoil, like the crash of 1987, the dot.com bubble, the global financial crisis, and the COVID pandemic. You will find historical data going back more than a century and discussing how investors, economies, and stock prices interacted with each other over various periods and events. This book also has some of the greatest coverage of global macro topics (such as monetary policy and various interest rate environments, the business cycle, wars, etc.) and their links to the financial markets for the layperson. I highly recommend this one.

7. Cryptoassets: The Innovative Investor’s Guide to Bitcoin and Beyond, by Chris Burniske and Jack Tatar

To deviate a bit from stocks and other traditional asset classes, for crypto enthusiasts or those curious to find out more about how crypto and blockchain work, this is an excellent book. It gives ample coverage of the origins of Bitcoin and blockchain technology, it offers a way to classify the crypto space into a taxonomy that is easy to keep track of for non-experts, and it defends the case why crypto may be an excellent alternative asset addition to many individual portfolios. But it even goes further – if you ever wondered how one can possibly assess the value of cryptos, this book provides some ideas and guidance in that area as well. There is one thing, in particular, I found very useful in this book – it openly talks about the fact that many cryptocurrencies could be Ponzi schemes, and how one can potentially spot and protect oneself against such criminal activities.

8. Mastering the Market Cycle: Getting the Odds on Your Side, by Howard Marks

This is a book suitable for both intermediate and more advanced investors who are looking for a way to systematically explore the characteristics of various types of economic cycles. Howard Marks shows us why we need to understand those cycles to know when is the best time to pile in or to pull out of certain investments. Knowing where we are in the cycle helps investors prepare both for what is likely coming next and avoid surprises, and also psychologically, to avoid panic or mistakes.

There are several types of cycles that the readers can familiarize themselves with – including the business cycle, the profit cycle, the risk attitude cycle, the credit cycle, etc. All of them are underpinned by certain developments in key economic variables but also by investor psychology. If I had one significant critical note on this book, it would be that its conceptual purpose has made Marks provide mostly graphs that are theoretical and not showing empirical data.

recommendations for more experienced investors

Venturing into more advanced territory now, these books will help individual investors most if they already have more significant prior knowledge of finance and investing, as well as some experience. Some of them discuss research and financial models which also require more in-depth knowledge of statistical models. (These books are not sorted by order of complexity.)

9. Modern Portfolio Management, by Todd E. Petzel

The book explores developments in the field of portfolio construction and management beyond Markowitz’s Modern Portfolio Theory and introduces tools and concepts that are very useful in evaluating new investment products and portfolio structures. And while it does cover core pillars and principles, such as setting investment objectives and selecting strategies given real-world constraints, it also looks at more advanced areas such as black swan portfolios, the use of derivatives, asset-backed securities, and other more complex portfolio structures.

The book is suitable for both individual investors, as well as professional investment committee members, institutional investors, and fiduciaries. Unlike other books in its category, it does not delve into complex mathematics and modeling to explain its concepts, which can be an advantage for the not-so-quantitative reader.

10. Too Smart for Our Own Good, by Bruce I. Jacobs

Too Smart for Our Own Good is essentially an analysis of financial risks over periods of both investment exuberance and unsustainable market growth. It explores some of the most important financial disasters seen in the last several decades and presents a compelling review of the core issues and lessons from those episodes – both in terms of risk management implications and investor behavior. The focus is not just on the US but also includes several notable globally relevant crashes and the European Debt Crisis.

Learning to properly balance risk and return when creating and managing investment portfolios is always a challenge, and can always lead to some excesses in the markets. Sometimes, in an attempt to reduce risk, investors have sought strategies that appeared to be safer or even risk-free, only to end up blowing themselves up. But this book helps readers understand the origins of such mistakes and ways in which they can be avoided in practice.

11. Equity Management: The Art and Science of Modern Quantitative Investing, by Bruce I. Jacobs and Kenneth N. Levy

This is a collection of industry-leading research that forms the foundation of quantitative equity investing. There is almost no aspect that remains uncovered: market inefficiencies, risk and return modeling, anomalies and regularities in stock returns, market psychology and value attribution, factor investing, and predictor specifications. The book contains very technical information and knowledge that will be most useful to professionals. It looks beyond classic long-short portfolio and optimization methods and delves into factor and scenario-oriented optimization, the role of leverage aversion in portfolio construction, and enhanced active strategies. The authors establish a framework, in which equity investments can be viewed and managed in the full context of ever more complex market interrelationships.

12. The Misbehavior of Markets, by Benoit B. Mandelbrot and Richard L. Hudson

A mathematical look at the financial markets reveals that they are much riskier than conventional investing books, textbooks, and advisors would have us believe. Existing theories and models of market behavior greatly underestimate these risks. Mandelbrot, based on his own studies and research, shows us that markets are more fractal than continuous and that many assumptions that we embed in our models, decisions, and expectations are simply wrong. The book is written in a much less technical, accessible language, so its findings can be understood by the average reader. The author explains in a very compelling way why his criticism of standard financial theory and widespread assumptions, is reasonable, spot-on, and rooted in actual data. He also does not shy away from predicting that relying on such assumptions and theories can not just expose portfolios to too much risk but it can also lead to global financial crashes.

13. Equity Smart Beta and Factor Investing for Practitioners, by Khalid Ghayur, Ronan G. Heaney, and Stephen C. Platt

As the title clearly shows, this book reviews the basics and more advanced aspects of smart beta and factor investing. It describes some of the most common factors and their specification, the empirical observation and measurement of factor premia, as well as various weighting schemes. In addition to that, it provides an analysis of performance and more practice-oriented material on how to implement such strategies. In alignment with recent trends, it also has a chapter dedicated to incorporating ESG with smart beta.

The authors are proven experts in the field and have compiled a really in-depth piece of knowledge in this book, which is also accessible to the average individual investor. It includes not just definitions of terms and concepts but also some new ideas and analysis, making it one of the most comprehensive reads on the topic.

14. Portfolio Management: Theory and Practice, by Scott D. Stewart, Christopher D. Piros, Jeffrey C. Heisler

This book is a guide that can be used by both individual investors and professional portfolio managers. It offers not just the theory, but it provides basic examples of implementation of each evaluation and analysis tool in practice. There are detailed test cases, as well as suggested Excel snippets which show case how one can do it on their own. The authors detail not just the asset allocation process but also some key challenges related to it that are rarely discussed in other books, the objective setting process, and it goes beyond a one-country coverage as it also focuses on alternative investment classes and global investing. Since it is a textbook, it is structured in a very logical way that enables a gradual build-up of knowledge and comprehension, from the simpler to the more complex concepts.

books with German or European perspective

Many of the books presented up to now included some universal concepts and knowledge applicable across markets, but some of them also had a very clear US focus. If you are based in Germany or elsewhere in Europe, you could also check out the books listed below. Note that some might only be available in German.

15. How to Invest in Index Funds, by Mario Nzualo

This is a good introductory book whose purpose is not to provide theory but to lay out the investment landscape available to Europe-based investors. It focuses mainly on the topic of passive investing, as it pertains to index funds and more specifically ETFs. It does look at some of the possible account options available across some major European countries, and it provides some concrete ETF examples (both equity and fixed income) that may be suitable for some investors – as well as some guidance as to how individual investors can make a selection. Various allocation approaches are also discussed so that the reader can get familiar with what they are and how they can be used.

The book is not comprehensive by any means, but it does cover core principles and does offer some advice more suitable for Europeans. It is a good starting point for those who do not know where to begin.

16. Global Investing, by Darrin Erickson

What’s really great about this book is that it looks at many potentially lucrative regions for investing worldwide, not just Europe but also the Asia-Pacific region, Africa, and Latin America. It reviews the structure of the global economy and international financial markets, which is critical in understanding the opportunities that other regions outside of the US have to offer. That is, it offers both a general and a more sector-specific view of the investing landscape.

The author provides multiple insights about the underlying dynamics in those markets and their drivers and highlights some of the key risks that every investor needs to keep in mind before making a decision. He also suggests a number of additional tools and resources (both free and paid) that can provide more detailed information enabling a more in-depth analysis in whichever region one is focusing on.

17. Souverän Investieren für Einsteiger, by Gerd Kommer

For German-speaking beginners, this book provides an excellent introduction to personal financial planning and investing. Many people who need to rely on a pension in retirement might find out that it is not sufficient – to close the gap, this book and the series it is part of, provide guidance on how to invest and build wealth that closes that potential gap. Dr. Gerd Kommer owns a financial advisory and wealth management company for private investors and small and medium enterprises and foundations based in Munich. His goal with this book is to lay out the core principles, risks, and potential mistakes people make when starting with investing. He outlines how to think (and how not to think) about ETF investments and how they are treated in Germany, and what kinds of investment accounts and which providers to open.

18. Souverän Investieren mit Indexfonds und ETFs: Ein Investmentbuch für Fortgeschrittene Privatanleger, by Gerd Kommer

Taking it to the next level, this is the sequence to the previous book for slightly more advanced and experienced private investors by Dr. Kommer. It goes deeper into common investor errors and the most important measures of portfolio risk. However, some of the theoretical discussions could sound a bit dry and abstract to the average reader – and some ideas about a global portfolio might seem a bit vague. For a more detailed discussion on the methodology and suitability of asset allocation, I would rather recommend one of the previously mentioned books as this one does not provide sufficiently deep coverage.

19. Handbuch Geldanlage

This is a good beginner to intermediate reading with a focus on German specifics. It is well-organized and highlights key facts and figures. It includes useful checklists for some of the most important investment decisions and it goes deeper into some less-discussed topics in other books, such as taxation and legal requirements for certain types of accounts and certain investment instruments. It covers not just ETFs and stocks, but also fixed-income products, various savings accounts, real estate and derivatives available in Germany, as well as alternative investments (including cryptocurrencies). The authors have given some practical examples and empirical data to support the case for some of the recommended choices or criteria.

bonus: NEW 2023 arrival worth checking out

A new book that came out in 2023 and grabbed my attention:

20. What I Learned About Investing from Darwin, by Pulak Prasad

This book is witty and very thought-provoking – written in the author’s specific style, it goes over all core principles of investing while still offering an original philosophical insight based on the author’s own experience. This is probably one of the few books on my list that is anything but boring – on the contrary, it engages you almost immediately and keeps you interested until the very end. It has a lot of practical examples and they are presented in a way that makes it easy to comprehend the suggested investment approach. As Ian Robertson notes in his recent review of the book, “The book is a potent reminder to investment professionals that all the technical skills in the world are no substitute for good perspective and strategy.”

For any beginner or any individual investor really, I highly recommend this book!