The Investment Answer by Daniel C. Goldie and Gordon S. Murray

Perfect for: Those who are time-poor, just getting started, or have limited investment knowledge.

At just ninety-six pages, this book is perfect for someone who wants a brief, no nonsense introduction to investing. This is an ideal first book if you want to learn the basics of investing. The book simplifies the complexities of investment strategies, focusing on five key decisions that every investor must make:

The Do-It-Yourself Decision:

• Decide whether to manage your investments yourself or seek professional advice.

The Asset Allocation Decision:

• Choose how to allocate investments among stocks, bonds, and other asset classes.

The Diversification Decision:

• Diversify investments to reduce risk.

The Active vs. Passive Decision:

• Decide between actively managed funds or passively managed index funds.

The Rebalancing Decision:

• Periodically rebalance your portfolio to maintain your desired allocation.

Written in plain language, the book emphasizes the importance of long-term planning, minimizing fees, and maintaining a disciplined approach to investing. I like this book as it’s particularly valuable for beginners or anyone seeking a straightforward framework for managing their investments.

The Little Book of Common Sense Investing by John C. Bogle

Perfect For: Persons of any age, or of any level of investment knowledge. Particularly helpful to those who pick stocks and have found out they are not Warren Buffett.

If you had to read one book on investing – this is it! Jack Bogle, the founder of Vanguard, has written the ultimate guide to investing. This is probably the best book ever written for everyday investors to help them understand how the markets and financial services industry functions.

The main investment themes are:

Investing in Broad Market Indexes:

• Bogle advocates for low-cost index funds, which mirror the performance of entire markets (e.g., the S&P 500).
• Index funds provide diversification, reduce the risk of individual stock selection, and capture the market's overall returns.

The Power of Compounding:

• Long-term investing allows compounding to work in your favour, amplifying growth over decades.

The Importance of Low Costs:

• High fees, expenses, and taxes erode investment returns. Bogle stresses choosing investments with low management fees and minimizing trading.

Avoiding Active Management:

• Actively managed funds underperform index funds over the long term due to higher costs and market inefficiencies.
• Attempting to "beat the market" often leads to poor results due to market timing and emotional decision-making.

Staying the Course:

• Stick to a simple investment plan regardless of market fluctuations or short-term noise.
• Avoid emotional reactions to market volatility and focus on the long-term growth.

Bogle's central message is that simplicity, patience, and low costs are the cornerstones of successful investing. By following these principles, investors can achieve better outcomes while avoiding the pitfalls of speculation and high-cost investing.

Just Keep Buying by Nick Maggiulli

Perfect for: This a book that should be read by all, but I think it will be of particular use to those who are just starting out or have recently joined the workforce. This a “must read” book if you are between the age of 18-30.

One of the fundamental issues with investment books is that they fail to give concrete actionable advice. This book is different. The author provides empirical evidence to answer practical questions such as

How much should I save?

How to spend money guilt-free?

What should I invest in?

Should I invest a lump-sum or become a regular investor?

Maggiulli offers specific, actionable advice to help readers optimize their saving and investing habits. The key pieces of advice include:

On Saving

Save as Much as You Can, When You Can:

• Focus on saving aggressively during high-income periods, especially in your early earning years, rather than maintaining a fixed savings rate.

Don’t Over-Save:

• Avoid sacrificing quality of life by over-saving. Instead, balance saving for the future and enjoying the present.

Prioritize Income Growth:

• Instead of focusing solely on cutting expenses, invest in skills and career growth to increase your earning potential.

On Investing

Invest Automatically and Regularly:

• Use dollar-cost averaging to invest consistently, regardless of market conditions.

Stay Invested:

• Avoid trying to time the market; the best returns come from staying invested long-term.

Focus on Simplicity:

• Stick to diversified, low-cost index funds rather than complex or speculative investments.

On Behavioural Finance

Don’t Wait for Perfect Conditions:

• Start saving and investing as soon as possible, even if the amount is small.

Leverage Data Over Intuition:

• Base financial decisions on historical evidence rather than emotions or predictions.

Avoid Over-Analysing:

• Adopt a “good enough” mindset and act instead of waiting for the perfect strategy.

Maggiulli’s advice encourages a practical, balanced approach to building wealth, focusing on actionable steps rather than rigid financial rules. This is why this book is a “must read” for those earlier in their career.