F R O M O N E O F T H E G R E A T E S T I N V E S T O R S O F A L L T I M E 7 R U L E S O F I N V E S T I N G 7 From 1977-1990, Peter Lynch ran one of the most successful mutual funds ever, posting an average annual return of 29%. There are many principles of investing Lynch has espoused over his career. Here are seven of the most important.
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Invest in companies, industries, and funds you understand well. What do they do? Who uses their goods or services? Is it a company you would want to do business with yourself? No one can predict where the markets will go, or what the economy will do, so don't even try. Instead, focus on what you can control, like the types of companies or funds you invest in, how much you save, etc. Investing isn't a race. You have plenty of time to do your research and find outstanding companies to invest in. Follow the turtle's example, not the hare's. Investing isn't gambling, either. While we have no control over the markets, we do have control over how much risk we take on. Your portfolio isn't the place for speculation or bets. For that, head to Vegas. Invest in companies that have proven management, a strong business model, and that sell things people actually use. Otherwise, you're investing in companies you guess might prove popular...and that's just another form of gambling. Even the greatest investors sometimes get things wrong. When that happens, accept it humbly and try to determine how you can improve. Before investing, can you explain to a family member what you're buying and why? Can you describe how that company or fund works? If not, take your time and do more research.
k n o w w h a t y o u o w n
p r e d i c t i o n i s f u t i l e
t a k e y o u r t i m e
a v o i d l o n g s h o t s
B u y g o o d c o m p a n i e s
l e a r n f r o m y o u r m i s t a k e s
b e f o r e y o u b u y , b e a b l e t o e x p l a i n
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Reference: "The Greatest Investors: Peter Lynch" https://www.investopedia.com/university/greatest/peterlynch.asp
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