Expert Advice on Investment From Peter Lynch
At some point, we all want to grow our financial status, and the best way to do it is to invest. Investment helps us make extra money without putting a daily 6 hours into it. And to all those who are already wondering how much extra? Know that it’s enormous, but it depends on how and where you invest.
With that said, there’s always something to know before you jump into the investment world. And to help you take the leap, we’ve rounded up key advice from the master of investment himself – Peter Lynch.
Shall we begin?
No research, no investment
We highly recommend that you find out as much as you can about the market before investing. It will take time, but it will be worth it. Also, please remember to stay away from buying a stake in a company without studying completely about it. Don’t let public market liquidity force you into anything. Isn’t the money you’re thinking of investing hard earned? So why hesitate in putting some extra effort into research? Try to develop your perspective when you decide to invest.
You can take a simple test by Lynch, that’ll give you a better idea of where to start researching. According to him, you should try to explain to a fourth-grade student why you want to invest in something. Of course, you’ll have to make an effort not to bore them! While you’re trying to convince them, you’ll find the real reason for your investment and then you’ll be able to evaluate better whether it’s a good decision.
Get ready for volatility
Did you know that contrary to the common belief that the brain is essential, the gut is more important when it comes to investing? Please don’t get confused, but this is what Lynch says.
Not getting scared by the term “stock” is important. For investors to get a great return on successful company stocks, they might even have to hold on to serious pullbacks. In this scenario, discipline ranks above intelligence.
Don’t believe it? Well, what would you call Amazon and Apple’s pullback strategies then? Over the years, both giants have witnessed several instances of more than 30 percent pullback through their journey to their impressive current worth. But they didn’t back out or fail, did they? Even pro investors sometimes can’t stomach up the courage to prepare for such volatility. But if you wish to sustain, you’ve got to have an open mind.
We know investments are scary and there’s a lot at stake when you put your savings on the table. But the truth is that in the long term, with an expert helping you out with research and information collection, you have great chances of making it through.
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