Peter Lynch is one of the greatest investors ever, so quite obviously you would want to get the returns he did. How did he go about managing a top performing fund and how can you apply that to your portfolio?
First of all, who is Peter Lynch? Peter Lynch is now a research consultant for Fidelity Investments. He has worked with the company since 1966. Between 1977 and 1990 he managed Fidelity Magellan, the world's most successful mutual fund during that period. He achieved a stunning annual return of 29% over those years.
Look for these books at a nearby bookstore Peter Lynch has written two great books called "One up on Wall Street" and "Beating the Street." These are two great ways to get inside of the mind of an investment genious that can help you make money.
Peter Lynch's biggest key to investing in a company is to know what you own. Lynch believes that an investor should be able to be completely understand the company and how it works and earns money before they invest in it.
Good management is absolutely vital to a company's well-being. Lynch states numerous times that one of the main lessons he learned is to do your research and see how the current management has done and if it is poorly, even if the product seems great you should stay away. There are lots of ways for bad management to ruin a great idea.
In order to invest like Peter Lynch you must be a long term investor. Lynch believes that predicting where the market will be in 2 or 3 years is a coin flip, but over a 10 or 20 year period the market is relatively predictable. Do not worry yourself with short term fluctuations.
Don't ignore that light bulb Don't shy away from buying stock in companies you deal with on a daily basis. Use the information that you have about a specific company or product to your advantage. By doing this you are actually ahead of the wall street insiders. Buy what you already know!
By ehow.com
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