Peter Lynch – Stock Market for Beginners
#PeterLynch (born January 19, 1944) is an #American #investor, #mutualfund #manager, and philanthropist. As the manager of the Magellan Fund at #Fidelity Investments between 1977 and 1990, Lynch averaged a 29.2% annual return, consistently more than doubling the S&P 500 market #index and making it the #best #performing mutual fund in the world. During his tenure, assets under #management increased from $18 million to $14 billion.
He also co-authored a number of #books and papers on investing and coined a number of well-known mantras of modern individual #investing #strategies, such as Invest in what you know and ten bagger. Lynch is consistently described as a “legend” by the financial media for his performance record, and was called “#legendary” by Jason Zweig in his 2003 update of #BenjaminGraham’s book, The Intelligent Investor.
Learn to Earn
His most famous investment principle is simply, “Invest in what you know,” popularizing the economic concept of “local knowledge”. Since most people tend to become expert in certain fields, applying this basic “invest in what you know” principle helps individual #investors find good #undervalued #stocks.
Lynch uses this principle as a starting point for investors. He has also often said that the individual investor is more capable of making #money from stocks than a fund manager, because they are able to spot good investments in their day-to-day lives before #WallStreet. His simple approach to investing stems from the idea that anyone can be successful in the stock market, all it takes is a little #research, #patience and #resilience. Lynch believes everyday investors have an advantage over Wall Street professionals because of their familiarity with the market place.
Investing Lessons Learned from Peter Lynch
Peter Lynch is one of the most successful #institutional investors of #alltime. For context, $1 invested in Lynch’s fund from the beginning would have turned into $28, he says “Everyone has the #brainpower to follow the #stockmarket.
Learn to Earn – A #Beginner’s Guide to The #Basics of Investing and Business was written to fulfill two reasons, one was to make sure that the ‘rich get richer, poor get poorer’ principle doesn’t dwell in business for long.
Peter Lynch’s #investment #philosophy was quite simple and can be summarized into four elements:
- Do your research
- Understand the importance of diversification
- Be patient
- Invest in what you know