Due to the current circuit breaker, many individuals are looking for productive ways to pass the time. At the same time, there has been increased interest in investing giving the recent market volatility.
As we've recommended many times before, it is important to give yourself as much background knowledge as possible before investing your hard earned money.
To help you pass the time and learn more about investing, we've compiled a list of books based on recommendations from leaders in the finance industry in Singapore.
Freddy Lim, StashAway Co-Founder & Chief Investment Officer
Against the Gods: The Remarkable Story of Risk by Peter L Bernstein
Lim's recommendation, Against the Gods, takes a historical perspective, and explores our understanding of risk throughout different eras.
In this highly-rated book, Bernstein illustrates how risk impacts a wide range of ventures. As Lim says, "Risk is inherent in our everyday lives.
The book is a comprehensive history of man’s efforts to understand risk and probability. It is an ambitious expose on how risks are being managed from olden times to modern days."
Sam Rhee - Chairman & Chief Investment Officer, Endowus
The Little Book of Common Sense Investing: The Only Way to Guarantee Your Fair Share of Stock Market Returns by John Bogle.
This book's author is the founder of the Vanguard Group, which is a pioneer and leader of mutual funds and low cost index funds. In his book, Bogle shares his investing philosophy and explains the importance of passive investing.
It is clear that the book has influenced Mr. Rhee, who told us "Singapore lacks access to the best passive index funds, so Endowus was set up to try and fix this problem and has succeeded in bringing in Vanguard passive index funds into CPF for example. So it's a special book because we work with value-aligned investment partners like Vanguard and Dimensional so closely."
Rhee also emphasises the importance of the book's subtitle. "It refers to the tragedy that 'the miracle of compounding returns has been overwhelmed by the tyranny of compounding costs".
People want to be a hero and boast about outsized returns on a few of their investments, but just lowering costs could be the fastest way to investment success if you can have a long term focus and have globally diversified market exposure to take advantage of the power of compounding returns."
Adam Reynolds, Saxo Markets APAC CEO
Manias, Panics, and Crashes: A History of Financial Crises by Charles P. Kindleberger
Kindleberger's book, originally published in 1978 is just as relevant more than 40 years later. Klinberger was a financial historian and Ford Professor of Economics at MIT for more than 30 years.
In his book, Kindleberger examines the natural patterns of financial crises, which provides a historical perspective for readers.
As Reynolds, CEO of Saxo Markets APAC, says, "learning from history is much more important than learning from any trading guru". The book currently goes for a whopping S$94 on Amazon, but you can listen to the book on Audible for free during the platform's free trial.
Kay Van-Petersen, Saxo Markets Global Macro Strategist
Richest Man in Babylon by George Samuel Clason
Clason's classic isn't specifically an investing book, per se. However, the book covers personal finance topics including financial planning, wealth management and savings.
These are clearly essential subjects for any investor. As Van-Petersen says, "If you don’t understand money, then looking to invest is the proverbial cart before the horse. You’d be surprised how many high paid executives have very little fundamental basic knowledge on the creation of wealth."
Not only that, the book is a relatively easy read, Van-Petersen suggests that you could even read it with your children.
Bianca Fischer, IG Premium Client Manager
The Big Short: Inside the Doomsday Machine by Michael Lewis
Fischer's pick, The Big Short, tells the story of the housing bubble of 2006-2007 in the United States, which led to the financial crisis of 2007-2008.
Fischer appreciates the lessons from the book, especially the lessons it teaches to aspiring traders. In her words, "Know your instrument, and study the instrument and understand basically what it entails and everything that comes with it".
If you're interested, The Big Short was also developed into an award winning movie in 2015.
Kelvin Teo, Funding Societies Co-Founder & Group CEO
The Intelligent Investor by Benjamin Graham
The Intelligent Investor is considered by many to be the gold standard when it comes to investing books. In Teo's words, "After 70 years, this 1949 classic is still a must-read, because the market is made up of humans and human nature has not changed. It teaches about investment fundamentals as much as one’s character."
If Teo's highly qualified recommendation isn't enough, Warren Buffet has called the book "by far the best book on investing ever written"—quite the endorsement.
DJ Kang, Founder & CEO of ValueChampion
Margin of Safety: Risk-Averse Value Investing Strategies for the Thoughtful Investor by Seth Klarman
Margin of Safety teaches readers about investing, but also about critical thinking. One parable that stuck out to DJ was the story of trading canned sardines. Without giving too much away, this story illustrates the difference between speculation and rigorous investing.
In DJ's words, Klarman's book teaches that "investing all about finding situations where you can make money even when you are not entirely right, because you have a significant margin of safety.
For example, if you thought something was growing at 30 per cent, you will still make money if you are wrong and it grows by just 10-20 per cent".
Since the book is no longer published, it typically fetches more than $1,000 for a used copy. We recommend searching the internet for a free copy or contacting someone that might have a copy you can borrow.
Stay safe & keep learning
Whether you invest in stocks using your online brokerage, local startups on a crowdfunding platform, or rely on a leading robo advisor like Endowus or Stashaway, there is something to learn from each of these books.
We sincerely hope that you and your family are healthy and happy, and that these books help you pass the time during the circuit breaker.
For the latest updates on the coronavirus, visit here.
This article was first published in ValueChampion.