World’s Book Day: What are the favourite books of professional investors?

World's Book Day is celebrated around the world on April the 23rd, a celebration dating back to 1926.

With this celebration as a background, we wanted to find out which are the favourite books of professionals in the sector. Which one has helped them the most during their career? Find out the books that every investment professional should read!

Stocks for the Long Run, by Jeremy J. Siegel with Jeremy Schwartz

Vitaliano Paridi, Private Banker at Fideuram Intesa Sanpaolo

'A Must-Read for Financial Sector Professionals'

In the ever-evolving world of finance, staying ahead of the curve is crucial for professionals in the sector. One book that has proven to be a valuable guide for individuals seeking to deepen their understanding of the stock market is 'Stocks for the Long Run' by Jeremy J. Siegel with Jeremy Schwartz. With its insightful analysis and comprehensive research, this book offers invaluable knowledge and strategies tailored specifically for those in the financial sector.

A Historical Perspective

'Stocks for the Long Run' provides readers with a historical perspective on the performance of the stock market. By examining long-term trends and patterns, the book offers a compelling argument for the importance of investing in stocks for wealth creation. Financial professionals can benefit from this historical context, enabling them to make informed decisions based on a deep understanding of market cycles and trends.

Emphasis on Long-Term Investing

One of the key takeaways from the book is the power of long-term investing. Siegel demonstrates that over extended periods, stocks have consistently outperformed other investment options, such as bonds or cash. Financial sector professionals can utilize this insight to educate their clients and help them develop a long-term investment strategy, emphasizing the potential benefits of staying invested in quality stocks.

Diversification Strategies

'Stocks for the Long Run' presents various diversification strategies that can mitigate risk and enhance portfolio performance. By examining different asset classes and their historical returns, Siegel provides a framework for constructing well-diversified portfolios. Financial professionals can utilize these strategies to advise their clients on the importance of diversification and help them achieve a balanced investment approach.

Insights into Behavioural Finance

Understanding human behavior and its impact on investment decisions is crucial in the financial sector. The book delves into the realm of behavioral finance, exploring psychological biases that often lead to suboptimal investment choices. By recognizing these biases, financial professionals can better guide their clients, helping them make rational investment decisions and avoid common pitfalls.

Practical Application

'Stocks for the Long Run' is not just a theoretical exploration; it offers practical advice that financial professionals can implement in their day-to-day work. From asset allocation strategies to risk management techniques, the book equips readers with actionable insights that can enhance their investment practices and ultimately benefit their clients.

Conclusion

For professionals in the financial sector, 'Stocks for the Long Run' is a captivating and informative book that provides a comprehensive understanding of stock market investing. By offering historical context, emphasizing long-term strategies, and addressing behavioral finance, this book equips financial professionals with the knowledge and tools necessary to navigate the complexities of the market. Whether you are a seasoned investor or a novice in the field, 'Stocks for the Long Run' is an essential read that will undoubtedly enhance your understanding of stock market dynamics and help you make more informed decisions in your financial practice.

Love in the Time of Cholera, by Gabriel García Márquez

Puy Carazo, Head of Advisory at Deutsche Bank Wealth Management

My favourite book is not related, not at all, to the financial market, but by professional default, I cannot avoid associating it… for more than two years now, in a time when everything unpredictable becomes a reality and volatility becomes the master of the markets and of our lives, Gabriel Garcia Márquez's words come to my mind in his novel 'Love in the Time of Cholera' which said 'the most important thing in a good marriage is not happiness, but stability'.

Stability is much less glamorous than happiness, it is like risk to profitability, they are sides of the same coin and perhaps we had forgotten the importance of that word, because we are human and we tend to value things when we no longer have them, and I think it is a perfect time to remember that in life in general and in investments in particular, stability should be an imperative in our decisions.

Let us seek an optimal management of risk and volatility and thus avoid hasty decisions that will deviate us from our course. Let us be better investors and let us prove to the author that we have overcome ourselves, that we learn and that 'wisdom comes to us when it is no longer of any use to us' does not apply to our portfolios. We have learned from this and it is our duty in our work as financial advisors to accompany our clients in this process, so that they can focus on enjoying the profitability.

Liar's Poker & Irrational Exuberance

Alessandro Greppi, Portfolio Manager at Zurich Bank

Liar's Poker and Irrational Exuberance are among my favorite books because they offer unique insights into the world of finance and investments. Liar's Poker provides a look at the world of Wall Street in the '80s, capturing the aggressive nature and competition of that period. Michael Lewis's narrative exposes the absurdity and risk inherent in the financial system, making it a timeless read for anyone fascinated by the dynamics of financial markets.

Irrational Exuberance, by Robert J. Shiller, instead analyzes the psychological drivers behind speculative bubbles. Shiller's analysis is not only deep but also prophetic, predicting the dot-com and real estate bubbles. His work underscores the importance of behavioral economics, challenging traditional notions of rational markets and highlighting the cyclical nature of investor sentiment and its impact on market prices.