I recently finished reading two books that I highly recommend:
- Justin Fox's The Myth of the Rational Market
- Jonathan Clements' The Little Book of Main Street Money
The basic message Fox delivers is that while markets are not perfectly efficient and investors are not always rational, the winning strategy is to invest as if they were -- in other words, invest in index funds, not actively managed funds.
The Little Book of Main Street Money There are very few journalists who actually have investor's interests at heart. Those that do write about what might be called the science of investing, or evidence-based investing. The rest write about the noise, or what Jane Bryant Quinn called "investment porn."
Clements was not only one of the few that truly had investor interests at heart, but he was one of the best of the group (if not the best). I considered his weekly column a must read. The same could be said of this little book. It's only little in size. It's giant in terms of the number of pearls of wisdom that it contains; pearls not limited to investing, but finance in general and life as well.
I highly recommend this book especially for those just beginning their financial journey -- it's a journey you shouldn't take without this book as a guide.