When I started investing in the stock market I never used a book to learn from and I was so very wrong. A couple of wrong moves and I was raking in huge losses. Now, in hindsight I should have used a couple of books to start with.
In my view you need to get your basics right initially and then start investing.
A couple of things that the books would have taught me are :
Risk taking ability – When I started investing I was never what a risk profile was and how to understand your taking ability. In hindsight, I know that I should have done that basic introspection as to how much of risk taking ability I have and how much of losses can I withstand.
Asset Allocation : All I wanted to was making huge gobs of money in the stock market. Asset allocation was not even a concept in my mind. So all my money went into the stock market without a thought. Of course I invested in the most buzzing stock of the day and boom! I lost almost every penny I invested in that stock. Wish I had read a book about stock market. I would have known about asset allocation. I would have understood the classes of stocks. I would have understood the Fundamental analysis as well as technical analysis.
How the stock market works: I never gave a damn about this. I knew that I had to invest and make money. How the index is calculated and how a particular stock that I had selected was not part of the index. Never mind , after this initial fiasco I started finding gems in books and I read all sorts of books on investing. I can tell that did not make a million however I make a decent amount of money in the stock market to buy some really cool gadgets for myself and nice gifts for my wife.
Oh and one more thing that I never absolutely cared about was the emergency fund thing. I always assumed that I will have my paycheck every month and that will last forever. After reading the book on investing, the first thing that is preached is to have an emergency fund. Very good advice and that is the one I have acted on. I now have about seven months salary stashed in a bank account as the emergency fund.
Again here is my list of two basic books which I think are very good and give you the basic stuff to start reading. These are Kindle editions and these are short and to the point, so make sure that you download and read.
A very good book and written in a concise crisp manner. You should buy that given the price and enjoy the read. It will help you understand the basics and hopefully get you started on the right path.
A beginners basic guide to stock market investing : Written by Evan J. Houpt this book is very conversational and literally talks to you page after page. Good insight into the psycgology of an investor and I like the gem in the end which tells you about the IPO’s . Buy it here