Top 5 Books to Learn How the Stock Market Works

Nearly half of Americans don’t invest because they say they lack a basic understanding of how the stock market works.

The following books break down the most important market essentials, removing some of the confusion and making it easy for beginners.

Stock Market for Beginners Book: Stock Market Basics Explained for Beginners Investing in the Stock Market

• Author: Evan J. Houpt, John Border
• Published: 2014

This book covers a full range of topics, including how to evaluate your investment needs. It explains why companies issue stocks, the difference between bull and bear markets, what initial public offerings (IPOs) are, and how to choose a broker, among other things. The authors use real company examples, and presents different options for investing.

Stock Market 101: From Bull and Bear Markets to Dividends, Shares and Margins–Your Essential Guide to the Stock Market

• Author: Michele Cagan
• Published: 2016

In addition to explaining stock market basics from bubbles to dividends, this book includes a brief history of how stock markets developed, as well as information about how politics and financial scandals can affect market performance. You’ll learn about economic indicators, indexes such as the Dow Jones and NASDAQ, and the most common investments, as well as the nuts and bolts of picking a good broker. Easy-to-apply lessons also set this book apart.

The Psychology of the Stock Market

• Author: G.C. Selden
• Published:1912

This isn’t a book for beginners and you’ll want to familiarize yourself with some basic stock market terminology before diving in. But it offers a solid overview of the psychology that can move markets and motivate investing. The book also explains why it’s important to be disciplined, and why it’s critical to leave your emotions and expectations for quick profits on the sidelines when you’re investing.

Stocks for Beginners: The #1 Money Making Starter Guide

• Author: Rich Harrington
• Published: 2016

This concise, 92-page book cuts out much of the fluff found in other stock market guides for beginners, at times reading like an expanded glossary of financial terms. Nevertheless, it covers a broad range of topics, including how to pick a stock, how to choose a broker, and more. The author summarizes each chapter with bullet points, making it easy to remember critical points and definitions.

The Stock Market

• Author: Richard J. Teweles, Edward S. Bradley
• Published: 1998

This book offers more than 500 pages of information about stock exchanges, investment banks, regulations, investing practices, and more. You’re not likely to read this in a single sitting, but it’s a must-have reference book for any beginner looking for financial history and terminology in one place.