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How should individual investors approach picking stocks? They'll put $5,000 or $10,000 on some zany idea they heard on the bus. They'll work hours to save a hundred dollars on a roundtrip air ticket. The public's careful when they buy a house, when they buy a refrigerator, when they buy a car. What's the biggest mistake you see individual investors making? I'm doing the same stuff I did at 19 and 20. I'm 75 now (I think middle age is 88 and old's 107). I did work on it, and I said, "it looks like a growth area." I think I paid for graduate school with Flying Tiger. I looked into it, and I said, "air cargo's the big thing." Flying Tiger wasn't carrying people, just cargo. I think that was just an example of luck, but I knew the reason I was buying. The Vietnam War took off and they had to fly a lot of stuff to Vietnam. At Boston College, I did a report on the air cargo industry, and I bought $300 worth of Flying Tiger airlines. I said, "Wow, this looks like a great thing to do." So I did. They'd talk about stocks and I'd look at them. It went up all the time, and people were recommending stocks. I started caddying at 11 in the '50s when the stock market was great. My father took sick when I was 7, died when I was 10. Lynch: 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. What should investors do when the market eventually tanks? You should think about being in a money market fund. But if you need the money in 1 or 2 years, you shouldn't be buying stocks. The stock market's been the best place to be over the last 10 years, 30 years, 100 years. Every time it went down, the fund went down more. Lynch: Over the 13 years I ran Magellan ® the market went down 9 times 10% or more. I mean, trying to predict market highs and lows is not productive.
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Is it going to be lower 2 years from now? Higher? I don't know.īut more people have lost money waiting for corrections and anticipating corrections than in the actual corrections.
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Lynch: Long term, the stock market's a very good place to be. What do you need to become a great investor?
#One up on wall street apa professional
Whether you enjoy picking individual stocks, aspire to it, or prefer to rely on professional management in the form of mutual funds, ETFs, or managed accounts, his plain-spoken wisdom can help you become a better investor. He also authored several top-selling books on investing, including One Up on Wall Street and Beating the Street, and has been a generous contributor to the Boston community, the Catholic Schools Foundation and the Inner City Scholarship Fund. Since then, Lynch has mentored virtually every equity analyst at Fidelity. Looking spry in a dark blue suit, yellow tie, and sneakers, he shared some of his investing wisdom with Viewpoints from Fidelity's Chart Room (where market trends were once hand-drawn and posted on the walls).įor the 13 years that Lynch ran Fidelity's Magellan ® Fund (1977–1990), he earned a reputation as a top performer, increasing assets under management from $18 million to $14 billion (as of 1990). Much has changed-but not Peter Lynch's boyish fascination with stocks. When Peter Lynch began work at Fidelity 50 years ago, you could buy lunch for less than a dollar, you had to wait for the mail to read an annual report, and the Dow Jones Industrial Average hadn’t hit 1,000.