Many investors fail to meet their investment goals for the year for various reasons. They do not understand the market well enough, their goals tend to be unrealistic, and they fail to recognize good opportunities and act on them at the right time.
This happens mainly because of a poor grasp of the fundamentals of investing. This is why it is important for investors to read as many books as they can about the investment world and understand it from the experts in the industry. Here are some reasons why investors should be voracious readers:
Build Your Knowledge Base
You will find many investment books that are suitable for beginners. They will give you a clear roadmap on how you can go about achieving your investment goals. It helps to read books on the same subject from various authors. You will find many powerful nuggets of insight from them.
Keep in mind that the more books you read, the stronger your foundation will be. This is known as the compounding effect. All the famous investors in the world are said to be voracious readers. Warren Buffett, one of the most successful investors who started investing at the age of eleven, is well known for his love of reading. He spends many hours of his day reading newspapers and corporate reports.
Understand the Psychology of Investing
In order to understand the market better, you can start by understanding how the mindset of an average investor typically works. You can make a study out of this and gain plenty of valuable insights.
An investor’s psychological profile plays a huge role in the way he makes his investment decisions. Hence, having a proper understanding of investment psychology will help you avoid many common psychological traps that investors tend to fall in.
You can start reading great investing psychology books like ‘The Psychology of Money’ by Morgan Housel, ‘The Behavioral Investor’ by Daniel Crosby, and ‘The Emotionally Intelligent Investor’ by Ravee Mehta.
Learn From the Experiences of Investors
One of the best things that you can do for your investment journey is to read biographies of famous investors. You will get a sense of how their brains work and the kind of attitude they bring to the world of investing. You will get plenty of real-world investment examples in such books and learn valuable things that you may not find elsewhere.
You can read popular investor biography books like “A Biography of the Legendary Investor” by Ray Dalio, ‘The Snowball: Warren Buffett and the Business of Life” by Alice Schroeder, and ‘Reminiscences of a Stock Operator’ by Edwin Lefevre.
To Sum Up
These are the main reasons why you should start reading more books on investment. Make sure that you set a reading goal for yourself. You can consider using speed reading techniques to cover more books in a year. Reading books on investment will inspire you and help you become a more intelligent investor.