Swedroe: Best Investment Science Books

A selection of the author’s top books for the evidence-based investor.

Investing is not a science, at least in the sense of a natural or physical science such as biology, chemistry or physics. Scientific phenomena are determined precisely and reproducibly by the rules of nature, whereas investing is contaminated by the complicated interactions of investors. This is why science has laws, and investing has hypotheses and models.

As the director of research for the Buckingham Family of Financial Services, I’ve read dozens of books on the “science of investing,” or what some have called “evidenced-based investing,” that I’ve both learned from and enjoyed, and would highly recommend.

I’m often asked for a list of what I consider the best books on the subject (of course, such lists are personal opinions). With that in mind, I sat down and narrowed my collection to the top baker’s dozen. So here they are. The order is alphabetical, by author. I hope you find them as impactful as I did.

1. “Capital Ideas” by Peter Bernstein
2. “Against the Gods” by Peter Bernstein                     
3. “Investment Management” by Peter Bernstein and Aswath Damodaran
4. “The Four Pillars of Investing” by William Bernstein
5. “Strategic Asset Allocation” by John Campbell and Luis Viceira
6. “The Equity Risk Premium” by Bradford Cornell
7. “Quantitative Value” by Wesley Gray and Tobias Carlisle
8. “Quantitative Momentum” by Wesley Gray and Jack Vogel
9. “Expected Returns” by Antti Ilmanen
10. “Adaptive Markets” by Andrew Lo
11. “Successful Investing Is a Process” by Jacques Lussier
12. “The Success Equation” by Michael Maubossin
13. “The Physics of Wall Street” by James Weatherall

My next post will provide my list of the dozen best books on behavioral finance.

Larry Swedroe is the director of research for The BAM Alliance, a community of more than 140 independent registered investment advisors throughout the country.