Money needed in the next two or three years should be kept in low-risk investments. Lynch was straight forward about not taking chances in the short-term with money you can’t afford to lose. If you need the money, don’t invest in stocks. Whether they make money or not, they ask – why was their theory right or why was it wrong? Know what was wrong so you don’t repeat it. Every investment they make has a theory behind it. They focus as much, if not more time studying their mistakes than they do their successes. Learn from your mistakes.Įvery great investor I’ve come across owns their mistakes. You can wait for the sky to fall or you can invest knowing it will happen, you’ll get through it, and the market will too. In the last 100 years, the market has seen it all and recovered. There is always something to worry about.Įvery day brings something different to worry about – inflation, recession, depression, natural disaster, war, market crash, and that bus when you cross the street. The lessons you’ll take away from both books far exceeds the ten below. Lynch documented his experience in two books: One Up on Wall Street and Beating the Street. From start to finish, that’s a 2700% return! He outpaced the S&P 500 11 out of 13 years, averaging a 29% annual return. During that time, he beat the pants off the market. Lynch ran the Fidelity Magellan Fund from 1977 to 1990. Though, it’s been over two decades since he managed money, the lessons he learned are timeless.
Peter Lynch is one of the greatest fund managers ever.