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The Best Stock Market Books for a Winning Portfolio

Updated on June 29, 2018
Sam Montana profile image

Sam has been a writer for 10 years and is interested in health, science and history. As a former stock broker, well versed in investing.

NASDAQ trading floor
NASDAQ trading floor | Source

Read, Learn and Succeed in the Stock Market

I have been a trader in stocks, mutual funds and options since 1983, and have learned a lot of lessons. I learned many lessons the hard way, which might sometimes be best way to learn.

To succeed in investing or trading in the stock market, you have to read, practice and read more. You can read a book once and think you understand it. Then go into the market and forget everything you read in that one book. Go back and read it again and pick up what you didn't understand that first time.

The more books you read on the subject, the better you will understand the subject. This is because one book might explain an idea better than another book, but a different book will explain yet another idea better. Read several books and more ideas, concepts and lessons will become clearer to you.

When it comes to stock market trading, investing or speculating books, there are thousands of them. You could spend all of your time reading the wrong books. Over the years, I have read countless stock market books and can only think of a handful of them that have been really helpful.

There are no get-rich-quick stock market type books listed here, because that doesn't really exist, unless you get very lucky. The way you get rich in the stock market is by learning and learning more, and staying in the game. Always keep plugging away smartly and by staying in the game. If you lose your money, you cannot stay in the stock market. So not losing your money is the number one lesson.

Since the stock market does not always go up, these books will teach you how to profit during bear markets or stock market corrections. A few of these books will teach you how to hedge your risk by learning about risk management and how to properly use options and inverse ETFs.

These books listed here are all worth your time and money to read. You will find yourself referring back to them again to make sure you understand each concept as you trade and invest in the stock market daily.

Learning about investing is very important, especially to make the right decisions in our retirement accounts.

$100 dollar bills
$100 dollar bills

Dividend Paying Stocks

Dividends are the best way to reach a long term financial goal. The way the stock market fluctuates is enough to keep anyone awake at night wondering about their 401k plans, retirement and their stock portfolios.

Good dividend paying stocks are usually stocks of companies that can endure rough economic times and will not fluctuate wildly. These dividend paying stocks will keep accumulating money for your portfolio year after year or if you choose, you can use the dividends as income. Finding a good dividend paying stock is not just finding the highest yields, since that can be very deceiving. If a stock has an uncommonly high yield for that industry, there is usually a reason. And the reason could be that the stock price recently fell dramatically and sooner than later, the dividend will be cut or eliminated.

Good steady companies that have paid and raised dividends every year for many years is what you should look for. These books about dividends will teach what to look for in steady dividend paying stocks. These stocks over the years are what are going to make you rich and all set for retirement.

You can look at what at lists of dividend paying stocks like the S&P 500 Aristocrats. This list will show you the stocks that have raised their dividends consistently for year and years. These are the best dividend paying stocks and are the most reliable.

There are no get rich quick schemes with dividends, just steady and accumulating dividends that add up over time. Another benefit of good dividend paying stocks is that they are usually older more established companies and these companies will sometimes do a stock split, which means you end up with more stocks over time accumulating more dividends.

There are just so many investing books out there today, it is hard to know who is right. One of the best dividend investing books is The Single Best Investment: Creating Wealth with Dividend Growth. This book is definitely a must read, and a book I refer to many times.

Today, many of us worry about our government pensions, company retirement plans and social security. Investing in dividend stocks is the best way to protect your retirement plans for the future.

Wall Street journal
Wall Street journal | Source

Stock Market Investing

Stock market investing is not day trading, swing trading or day trading. Investing requires the investor to do his homework. Picking companies you believe in for investing purposes, investing in companies for the long term.

Over time, investing in good companies is what makes your portfolio make money. Investing in companies that pay dividends and reinvesting those dividends along with stock splits can add up nicely. These types of companies are usually the more established companies.

But investing is more than investing in the established companies. There are growth companies that you can find that do not pay dividends because they reinvest their profits into bettering the company. These companies are great for your portfolio along with the more established companies.

Finding these companies takes research, reading and paying attention to trends. This does not mean investing in every new company or IPO that comes out. There are many companies that have been in business for years that have gone under the radar and are finally becoming noticed. Or maybe they recently came out with a new product or discovered a new method of accomplishing something.

Finding new companies to invest in can be exciting and financially rewarding. The following books are excellent books that will teach you the right ways to find companies to invest in.

One of the most definitive books about investing and specifically value investing is The Intelligent Investor by Benjamin Graham. This book is a classic and has been revised to reflect investing in the 21st century.

This book is written more for the value investor, but it has invaluable information for investing in all types of stocks.

Investing books by Peter Lynch like One Up On Wall Street is an excellent book about finding good companies to invest in and will teach the investor about investing in both growth and value stocks, since owning both types of stocks will diversify your portfolio.

Peter Lynch is still of the best known investors of all time. He ran the huge Magellan Fund at Fidelity, and was one of the most successful mutual fund managers of the time. He had a real knack for finding the best investments and for finding new companies to invest in. His book One Up On Wall Street is still referred as the book to read for investing advice and finding new companies.

With all of the fast moving markets and the stock market noise today, it can be very confusing, reading these books will make you a confident investor and help you get through all of that fast talk and noise.

Peter Lynch was one of the best mutual fund managers of all time, and his book can keep you grounded when it comes to finding the best stocks to invest in.

Foreclosure sign
Foreclosure sign | Source

The Great Recession of 2008

The Great Recession, as it has become to be known, started in 2008 was brought on by a number of factors. Toxic-mortgages, the collapse of the housing market and highly rated junk bonds backed by these mortgages. Bankers, mortgage lenders and Wall Street in general get most of the blame. Past and the current president plus congress also gets a good share of the blame going back to President Clinton for signing the repeal of the Glass-Steagall Act.

Is the recession over or still going on? This depends on what numbers you look at and who you ask. If you are still unemployed and your benefits have run out or you are under-employed and barely making it, then the recession is still ongoing for you. The stock market has recovered all of the lost ground and broken records. There is Wall Street and there is Main Street.

Learning about how the Great Recession is not only interesting reading, but also learning about history can prepare you for the future. Right now there is talk about another housing bubble already and the stock market has certainly gone almost straight up. Most think the market has only gone up during this slow economic period because of Federal Reserve policy and when that changes, the market will correct by a large percentage.

The following books will explain in detail just how we got into this economic mess, who is behind the mess and just how bad it was and still could be. Not to mention just how close we came to a repeat of the 1930s Great Depression.

Learning about history is the best knowledge you can ever gain. Like the old saying, those who ignore history are doomed to repeat it. The book, "The End of Wall Street" will teach you about history and how it can repeat itself. Learning this can help all investors avoid the same mistakes.

A great book about the 2008 housing and stock market crash is The End of Wall Street. This book will show you exactly what and how it happened, so you might be able to recognize the signs in the future, and not be financial hurt.

The way to have a winning portfolio is to understand past stock market actions, so you have understand possible future stock market movements.


Option Trading

Option trading can be fairly simple or it can involve complicated strategies. Buying calls or puts is fairly simple, but you can lose your money fast if you do not understand the basics.

Option trading can be very profitable and they can be used to hedge stock market volatility risks. Unlike stocks, options have a finite life and do expire at certain times. When you buy a call or a put option, you have to be right not only with the direction of the movement but also the amount.

You can buy call or put options on stocks or indexes. When you buy a call, you believe the underlying stock or index is going to go up in price by a certain date. And when you buy a put option, you believe the underlying stock or index will go down in price by a certain date. If you are wrong in either the amount the price will move or the amount of time, the most you can lose is the amount the option cost.

Selling or writing call or put options is riskier but your chances of profiting are greater. When you write an option, you are selling to the buyers of options. Sellers or options can gain a certain amount, but the risk is that they can lose much more.

There are many different strategies that involve buying and or selling multiple options that can limit risk to the point you will know exactly what you will gain or lose. But understanding these options takes learning and practice.

Trade Your Way to Wealth is an excellent book that will teach you simple but effective option strategies that can reduce your trading risk to practically nothing. If you already know the basics of option trading, this book will give you some new ideas for option trading.

Writing covered calls is another option strategy that many use to make reliable profits every month. Once you understand the different trading strategies of option, they can profitable.

Options are not for everyone, but once you learn how option trading can help you earn more money and or protect your investments, they can be very helpful. The following book helped me protect my investments with hedging and also make extra money. Remember, you have to learn, options are not gambling, they are investing.

Technical trading chart
Technical trading chart | Source

Fundamental and Technical Analysis

Fundamental analysis is an important step to picking the right stocks to invest in. Fundamental analysis is all about analyzing a companies earning, revenue, bottom line and all of their fundamentals.

Learning how to read a company's annual and earnings report is crucial to understanding the financial health of a company and if you should buy stock in the company.

Technical analysis is learning about reading charts. Learning at least the basics of reading charts can be important showing you where the company’s stock has been and where it might be going. Technical analysis can show you when to enter a stock or when to exit a position.

Understand both fundamental and technical analysis can help you know everything there is to know about the health of a company and how they look on a chart. I prefer fundamental analysis over technical, because it is important to know the financials of a company. But technical analysis and reading charts properly are just as important.

You will hear a great deal on the financial news about this or that chart formation and many trade on those chart formations, but knowing a company's financial health is crucial to investing for the long term. Once you learn how to read a company's annual report, you will know exactly what that company's value is and if you should invest in it at this time or wait.

There is technical and fundamental teachings. I have always used fundamental investing over technical. Knowing the value of a company is always useful. But learning technical charts is helpful because so many traders use it and trade on certain technical signs.

Learning how to read a company's annual report is very helpful as it will show you exactly the financial health of any company. A great book for everyone is Annual Reports 101: What the Numbers and the Fine Print Can Reveal About the True Health of a Company.

Using fundamental signs is best for the long term and technical trading is more for fast quick trades.

© 2009 Sam Montana

Reader Feedback

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    • KathyZ1 profile image


      5 years ago

      Interesting lens. Thanks for your sharing.

    • RothIRACustodians profile image


      6 years ago

      Never forget: INVESTMENT DIVERSITY!

    • profit confiden profile image

      profit confiden 

      6 years ago

      It is always nice to take the help of any investment genius before doing the investment. By the way , nice lens.

    • profile image


      6 years ago

      Good lens, My kinda lens :)

    • profile image


      6 years ago

      Very good lens! My favorite stock market book is "The Intelligent Investor" By Benjamin Graham.

    • profile image


      6 years ago

      Great list of books!

    • profile image


      6 years ago

      1: Never lose money. Rule No. 2: Never forget rule No. 1stock market today

    • Sam Montana profile imageAUTHOR

      Sam Montana 

      7 years ago

      @Tennis-Elbow-Cures: Thank you for your comments. These books should be a great help for anyone looking to trade, invest or learn.

    • profile image


      7 years ago

      Excellent source of information you've given for someone looking to jump into the stock market game. Well put together lens SamMontana! :-)All the best!Mike - penny stock investing

    • profile image


      9 years ago

      Hey thanks for this interesting insight Penny Stocksor Big and Hot Penny Stocks is a great topic to share...


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