9 Investing Tips from Peter Lynch That You Shouldn't Ignore
In the 1980s, one of the most well-known and most successful mutual funds was the Fidelity Magellan fund (NASDAQMUTFUND: FMAGX), and it was helmed by Peter Lynch, who ranks among the best investors ever. Just how good was Mr. Lynch? Well, from 1977 to 1990, the Magellan fund's net asset value grew by an annual average of about 29% -- almost double the growth rate of the S&P 500 index fund.
It's hard for any investor to achieve a 29% gain in a single year, and averaging that over many years hardly ever happens. Fortunately, Mr. Lynch hasn't kept his investing thoughts to himself. He has written several well-regarded books that are considered classics by many: One Up on Wall Street, Beating the Street, and Learn to Earn (the last one co-authored with John Rothchild). You're likely to emerge a smarter, savvier investor if you read one or more of those books, but you might start with nine of Lynch's lessons, below:
The past few months of stock market volatility have certainly made clear what Peter Lynch was saying in this quote. Those who don't expect volatility and can't handle it should look elsewhere to build wealth -- although there are few places where you can build wealth over the long run as effectively as in stocks. Lynch added: "You've got to look in the mirror every day and say: What am I going to do if the market goes down 10%? What do I do if it goes down 20%? Am I going to sell? Am I going to get out? If that's your answer, you should consider reducing your stock holdings today."
Source Fool.com
