The 5 Best Investing Books Of 2021

As 2021 comes to a close, it’s a good time to look back over the past year at the best books on investing. And we certainly had some good ones.

The five books that follow cover just about every aspect of investing. Some are ideal for beginners, while others for those who want to take a deeper dive on topics such as asset allocation or value investing.

Each of the books below can teach us some valuable lessons when it comes to investing.

1. More Straight Talk on Investing by Jack Brennan

First on our list is More Straight Talk on Investing by former Vanguard CEO Jack Brennan. It’s an update to his 2004 book Straight Talk on Investing and could easily be the only book on investing you ever read.

He covers every topic a new or experienced investor needs. The book assumes no previous knowledge on investing, and walks through everything from asset allocation to mutual funds, diversification to fees. Perhaps the most important part of the book comes in Part IV, Stay the Course. It’s here that Jack discuss the importance of sticking to your investment plan, in good times and bad.

2. Richer, Wiser, Happier: How the World’s Greatest Investors Win in Markets and Life by William Green

Richer, Wiser, Happier is a must read for value investors or those who want to better understand how value investors think about investing. Each chapter focuses on a value investor and how they approached investing. The book takes you into the minds of famed investors such as Mohnish Pabrai, Sir John Templeton, Howard Marks and Charlie Munger.

One of the most important lessons the book teaches is avoiding myopic thinking. In the heat of the moment, whether tech stocks in the 90s, real estate leading up to the Great Recession, or growth stocks and crypto today, the legendary investors remind us that things change in unpredictable ways. Referring to the pandemic, Howard Marks said that it “should convince us that we don’t know what’s going to happen . . . . Sometimes, we don’t even know what could happen.”

I need reminded of that from time to time.

3. Trillions: How a Band of Wall Street Renegades Invented the Index Fund and Changed Finance Forever by Robin Wigglesworth

Trillions is a wonderfully engaging story about the history of index funds. While it may seem odd to use the phrase “engaging story” in the same sentence with “index funds,” trust me, this book is a fantastic read.

Wigglesworth manages to weave the history of passive investing into a compelling story that includes the likes of Jack Bogle, Warren Buffett, Harry Markowitz, William Sharpe, Eugene Fama and Rex Sinquefield.

The value of the book, however, goes far beyond storytelling. It’s a valuable book for those wanting to understand just why index funds beat most active investors, even the professionals, over time. This is the one book on the list ideal for those who never want to read a book about investing.

4. Retirement Planning Guidebook: Navigating the Important Decisions for Retirement Success by Dr. Wade Pfau

For those in or near retirement, the Retirement Planning Guidebook is a must read. Dr. Pfau covers every aspect of retirement planning, from sustainable spending to annuities to long-term care planning.

What I appreciate most about this book is that it is agnostic when it comes to strategy. He’s neither pushing insurance products such as annuities are running away from them. They are just one of many tools a retiree can consider to help them reach their goals.

His discussion of the 4% rule is alone worth the cost of the book. He walks through the origins of the rule, and then puts it through his own evaluation. He tackles tough questions such as income investing, retirements that last longer than 30 years, and spending patterns in retirement. He even covers the bucket strategy, an approach I don’t embrace.

If you are in or nearing retirement, this is the book for you.

5. The Allocator’s Edge: A modern guide to alternative investments and the future of diversification by Phil Huber

I’m not at all convinced that most investors need alternative investments. Perhaps a small exposure to REITs will suffice the vast majority of us. I am, however, always interested in other perspectives, and The Allocator’s Edge gives us that in spades.

Phil Huber walks through his case for the need of alternatives, resting in large part on his view that the 60/40 portfolio is dead. He then covers a wide spectrum of alternatives ranging from insurance-linked assets to private equity to digital assets. He also provides suggested portfolios, and he even describes his own investment strategy into alternatives.

In the end I’ve not bought into the need for alternatives, but I continue to research the subject with an open mind. The Allocator’s Edge was a good resource to explore this area of investing.

And if the above books don’t fit the bill as you look for a holiday gift, there’s always my book published in 2019, Retire Before Mom and Dad—The Simple Numbers Behind a Lifetime of Financial Freedom.