At Five Books we take a sceptical attitude to financial advisers, in line with academic research that, with a few notable exceptions, most professionals are unable to outsmart the market. With the right tools, people can take on responsibility for their own investments, eliminating management costs, while buying and holding will keep down transaction costs.
We have interviewed a number of experts on how to get started. Burton Malkiel, who wrote the bestselling A Random Walk Down Wall Street, recommends his best books on investing. British economist John Kay makes Malkiel’s book the first choice of his best investing books for beginners. He also recommends The Snowball: Warren Buffet and the business of life by Alice Schroeder as a good read for a beginner. Buffet has never tried to be a Wall Street insider and is the most successful investor in history. The book also tells you what Buffet looks for when picking stocks.
Jason Zweig, author of the Little Book of Safe Money and columnist on the Wall Street Journal, chooses his best books on personal finance. He chooses Common Sense on Mutual Funds by John C Bogle, which argues for the merits of index investing as well as Why Smart People Make Big Money Mistakes by Gary Belsky & Thomas Gilovich, which explains the common pitfalls of investing. The fund manager and market commentator, Marc Faber offers his best books on investment. He argues that an understanding of financial history is important for making good investment decisions. He chooses Booms and Depressions by Irving Fisher as one of his choices and Manias, Panics and Crashes: A history of Financial Crises by Charles Kindleberger, as well as A History of Interest Rates by Sidney Homer and Richard Sylla, which covers the past few thousand years of interest rate cycles.
Marc Faber, the infamous investor known as “Dr Doom”, discusses books he considers indispensable for those interested in investment. He stresses the importance for investors to be historically aware, and holds that Irving Fisher is one of the best economists of the 20th century.