Summer reading ideas from the UMB Investment Management Group
If you find yourself with some spare time this summer, check out some of these book recommendations from UMB’s Investment Management Group.
These are must read books on investing from our senior investment professionals, which have helped them learn and gain insight into the industry.
FOR THE NEWBIE
Recommender: Spencer Berndt, CAIA, UMB vice president and investment product research manager
The Only Investment Guide You’ll Ever Need‡ by Andrew Tobias
Spencer’s story: I first read The Only Investment Guide You’ll Ever Need in 2005, and I reread it every couple of years. It has been hugely influential on both me and my family because it is full of practical recommendations that can be applied immediately. I own the 2005, 2011 and 2016 versions of this book, and have given many copies to friends and colleagues over the years. Whether you’ve been in the business for years or are just dipping your toe in the investment waters, this is one of my must read books on investing that can help clarify and explain the basics.
Description: Andrew Tobias provides a common-sense overview of money management, investments and more in this easy-to-consume read. Originally published in 1978, with the most recent update in 2016, the book covers a broad array of financial topics including saving, insurance, taxes and investing. Tobias’ accessible writing style allows readers to learn without becoming bogged down in minutia. For those that haven’t spent much time thinking about their financial lives or would like a little more direction, this is a great place to start.
FOR THE EXPERIENCED INVESTOR
Recommender: Will J. Reese, UMB vice president and head of equity research
The Little Book That Beats the Market‡ by Joel Greenblatt
Will’s story: My choice for must read books on investing proves you do not need an Ivy League degree to beat the market. As Warren Buffett said, “You don’t need to be a rocket scientist. Investing is not a game where the guy with the 160 IQ beats the guy with 130 IQ.” This book reveals the simple formula to successfully investing in the stock market. The portion of his formula that has captured my attention the most is Greenblatt’s recommendation to focus on firms that have a high return on equity profile. After all, would you rather earn 20 percent on your money or five percent?
Description: In this book, Joel Greenblatt, founder and managing partner at Gotham Capital, explains the basics of the stock market with tips for successful investing—including a formula for selecting stock at bargain prices. Beyond practical guidance for new and experienced investors, Greenblatt provides a wider lens to explain how and why investors win or fail. By injecting humor into a typically dry topic, the author makes the content approachable and the guide invaluable.
FOR THE STRATEGIST
Recommender: Mike Diederich, UMB executive vice president and director of portfolio management
Winning The Loser’s Game‡ by Charles D. Ellis
Mike’s Story: I first read this book during the summer of 1999—the same summer I took up golf. The author frames the premise of the book by drawing parallels between amateur level participation in games like golf and the “game” of the stock market. Most amateur golfers do not win a round of golf due to superior play over their opponent. Most wins can be credited to players who concentrate on making the least number of mistakes. The same principles apply to investing. Taking a long-term view that focuses on prudent returns and minimizing mistakes has proven to be a solid investment strategy. The book has helped me guide numerous clients to developing a “winning” financial plan. My golf game, however, did not see improvements after applying these theories.
Description: For more than half a century, Charles Ellis has worked with and observed investment experts to uncover the secrets to their success. This book covers several aspects of the investing world in short and sweet chapters that include behavioral economics, 401(k) plans, indexing and fees. His candid advice provides readers with starting points and next steps to becoming successful investors.
FOR THE LONG-TERM THINKER
Recommender: KC Mathews, CFA, UMB executive vice president and chief investment officer
One Up on Wall Street‡ by Peter Lynch
KC’s Story: I started my investment career in 1986. I was determined to be a student of the market and read many investment books. One Up on Wall Street was written in 1989, and I have never forgotten the message that many investment ideas are right in front of our noses. Keep your eyes open, ask lots of questions, and keep it simple is a mindset that has worked well for me throughout my career.
Description: In what has become a classic must read books on investing, Peter Lynch advocates for a long-term strategy and provides tips on how everyday investors can build a rewarding portfolio. He lays out simple steps to help you identify quality investment opportunities in the products and services you encounter every day. Lynch’s easy-to-follow advice guides you through investment decisions and educates readers on interpreting company financial statements to find the details that really matter.
FOR THOSE WHO NEED A REFRESHER
Recommender: Eric Kelley, executive vice president and managing director of research
The Wall Street Journal Guide to Understanding Money & Investing‡
Eric’s Story: My pick for must read books on investing is actually the first book I read on the topic of money and markets. It’s inexpensive, easy to read, and a great place to start if you’re new to the topics or intimidated by the financial section of the newspaper. This was the perfect resource for explanations of all the basic investing terms and topics, and it is still an approachable “first read” for those new to investing and money management. I can recall spending one weekend reading this great primer three times! It can help you gain an understanding of the basics so you can start digging into more advanced materials.
Description: This quick read will be your go-to reference for all things financial, from bonds and stocks to trends and mutual funds.
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