Important information - the value of investments and the income from them, can go down as well as up, so you may get back less than you invest.

WARREN Buffett famously said, “go to bed a little smarter each day”. One way the world class investor sharpened his investing knowledge was through reading. At the beginning of his career, he read up to 1,000 pages a day.

Regardless of where you are in your investment journey, books can certainly help you become a smart investor. But how can you select the best books?

Well, you could go down the traditional route and buy the best-sellers in the finance section but there’s another less obvious way in - self-help books.

Despite their focus on psychological wellbeing and self-improvement, self-help books come with accidental money tips.

Here are six recommendations from our bookshelves:

1. Rewire your mindset, by Brian Keane

 Becks Nunn, Senior Money Writer

This a book about owning your thinking and controlling your actions to make life changes. I particularly like the section about rewiring your mindset for fear, by feeling the fear and doing it anyway.

It’s a concept I’ve tried to embrace since I was young, thanks to first lady Eleanor Roosevelt who famously said, ‘do one thing every day that scares you.’ The idea, of course, is that you’ll only grow by trying new things.

Parallels can be drawn with investing, which is largely about taking risks (something that can feel scary to a lot of people). How much risk you feel comfortable with will depend on a number of things - such as your personal circumstances and your investing timeline. But risk isn’t something we should shy away from - or fear - as you could miss out on opportunities.

For example, take a look at the chart below. Shares are at the higher end of the risk spectrum. But greater risk can lead to potentially greater returns. A balanced portfolio should include a mix of all these assets, rewarding investors for staying invested and riding out market ups and downs. But ultimately, it's about taking risks that are right for you.

This example is for illustrative purposes only. In reality, investments go up and down and charges apply. Past performance is not a reliable indicator of future returns.


2. Unbound: A woman's guide to power, by Kasia Urbaniak

Emma-Lou Montgomery, Associate Director and Women and Money spokesperson

The book starts off with: “I spent 17 years studying to become a Taoist nun while working as one of the most successful dominatrices in the world”. So, you suspect that when she talks about the double-bind of being the “good girl” she ought to know her stuff. This book is a manifesto for female empowerment, but as a woman and an investor it works just as readily as part of your empowered money mindset too.

At Fidelity, we know all about the female double-bind that all too often has a detrimental impact on women’s financial wellness.  Take, for instance, the good mother/good daughter penalty that we inadvertently pay when we take time off to raise children or care for elderly parents.  It can mean we earn less and therefore save less into our pensions or savings. We have the data to show it has a detrimental impact on not only women’s lives but those of their families and wider society too.

The lesson is that a “good girl” may put others first, but she also needs to start to value herself as highly as she values those around her. So do everything you can to pay into your pension, to keep up with your savings and investments and to keep aside some money for your own freedom fund. It’s an act of self-care and as we’re continually told, self-care isn’t selfish, it’s essential.

Our research shows that if young women pay an extra 1% into their pension, as soon as they start working, they can bridge that gap that so easily - and all too often - exists when men and women of the same age come to retire.

Check out our Women and Money pages where we discuss the pension and gender gap.

It's important to keep in mind that you don't need a fortune to start investing. A small sum is more than good enough. It's a concept that's explored in this next book.

3. Playing and Reality by Donald Winnicott

Delving back in time to the 1970s and one of the seminal works by the British paediatrician and psychoanalyst Donald Winnicott, this book introduced the concept of “good enough” parenting, and specifically the “good enough mother”.

Without going into the psychoanalytic thinking here - but it is well worth a read - with “good enough mothering”, a child can have two worlds co-exist -  one full of fantasy and magic, but also one in which things don’t happen exactly as they want.

An investor might imagine themselves always buying low and selling high, or finding the next “big thing”, but reality is probably going to get in the way of that fantasy.

For me, the key takeaway from the “good enough” school of thought for us as investors is a broader acceptance that “good enough” is just that, good enough.

You don’t need a small fortune in order to start investing - a small, regular sum is “good enough” to get you going. You don’t need to know everything there is before you get started - it’s “good enough” to start out with the simplest knowledge and learn as you go.

And you have to face the reality that, while you may dream of being the one who always finds the “perfect” time to buy or sell your investments, if all goes well, you’ll be doing “good enough”.

4. Self-compassion, stop beating yourself up and leave insecurity behind, by Kristin Neff

Nafeesa Zaman, Money Writer

This book explores self-compassion - a powerful concept that I first discovered as a university student trying to find my place in the world.

“At the most basic level, self-compassion simply requires being a good friend to ourselves,” said Kristin.

She defines self-compassion as being made up of three components - self-kindness, common humanity, and mindfulness.

As a young investor, focusing on self-kindness and mindfulness has allowed me to make better financial decisions. It means I don’t criticise myself for not saving enough in my pension or my rainy-day fund. I don’t worry nearly as much if my portfolio is in the red. And most importantly - I stay present.

That means I save more regularly and I’m far less likely to make impulsive decisions. But it’s hard to take the emotion out of investing, especially since we’re all prone to thinking errors.

But there is one way to tackle this. Our new principles for good investing highlight the power of investing regularly. By investing little and often, it means you avoid making decisions in the moment that might affect your returns. It also means you're less likely to try and time the market - something that even the experts find hard to do.

5. The Compassionate Mind, by Paul Gilbert

Andrew Oxlade, Investment Director and Thisismoney columnist

Modern psychology frequently draws on two thousand years of wisdom. Investors can do the same.

One group of ancient philosophers, the Stoics of Greece and Rome, were early progenitors of the modern movement of CBT, or cognitive behavioural therapy. Epictetus, a Greek philosopher born into slavery and a life of brutally, told his followers: "It's not the events that upset us, but our judgments about the events.”

There are many books that explore CBT and stoicism. The Compassionate Mind by Paul Gilbert explains the evolutionary and social reasons that are brains are so responsive to threats, to losses and to danger.

In investment, being mindful of your response to stock market events makes for better investment choices. If we are upset about a portfolio slump, we are more inclined to make a bad choice, perhaps sell an investment at a low point.

This inclination can be particularly strong if it is combined with self-blame. The 1940s psychoanalyst, Karen Horney, said humans were ‘tyrannised’ by their own thinking of ‘oughts’, ‘shoulds’ and ‘musts’, which the Stoics also recognised. You may, for example, badger yourself with the thought, ‘I should have sold at least some of that fund when I was 50% up’. In the same vein, you may tell yourself you should have been a better parent and you must achieve more at work.

The CBT movement’s response is two-fold. A simple change of internal and external language helps:

“It would have been better to have sold when I was up, but I didn’t.”

“I would like to apply myself more at work to achieve better results.”

Acceptance of fear and pain is key, which leads me neatly on to…

6. The Happiness Trap, by Russ Harris

This book advocates Acceptance and Commitment Therapy (ACT is CBT with a twist). At its heart - don’t avoid the bad things, accept them and - most importantly - commit to your values, as did the Stoics. Write them down. They might seem obvious. Mine are obvious to me - always be kind, help others and remain calm, to name a few. They will guide your decisions, nullifying self-blame. But they must be yours. As the title of Martha Beck’s book suggests, it’s about Finding Your Own North Star.

We have tried to set out our own north star with our principles for good investing. If you already have values for life but want to write down your own values for investment, perhaps imbued with a little stoicism, this is the place to start.

Thinking about financial advice?

These books are a fantastic starting point, and they’ll likely prompt you to think about your money and whether it aligns with your financial goals.

If you feel like you need some help on your investing journey, financial advice may be worth considering. Find out more about financial advice or request a call back from a financial adviser.

Important information -  investors should note that the views expressed may no longer be current and may have already been acted upon. This information is not a personal recommendation for any particular investment. If you are unsure about the suitability of an investment you should speak to one of Fidelity’s advisers or an authorised financial adviser of your choice.

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