If there’s one thing all top investors agree on when it comes to investing, it’s to start investing as soon as possible. So what are you waiting for? Here are some of the well known investor, Peter Lynch’s, best investment advice to help get you started:
Only Buy Within your Comfort Zone
Much like many other top investors, such as Warren Buffett, Peter Lynch only invested in investments he completely understood and companies he knew were a safe bet. Lynch is confident when suggesting to other people looking for investment advice to do their research and invest solely within their comfort zone.
Price Trails Earnings
Peter Lynch strongly believes stock prices follow right behind the growth of long-term earnings. Lynch suggests when earnings are higher, stocks will be higher.
Stock Questions to Consider
According to Peter Lynch, there are two stock questions you should ask yourself before investing in stocks. One key question is “Is the stock still priced reasonably with the stock’s earnings?”. The second question Lynch suggests investors should ask themselves before investing in stocks is “What exactly is the company doing to cause the stock’s earnings to go up- what changes are they making?”. According to Lynch, these questions are important to ask yourself because stocks that are making good improvements and remaining at an attractive price are the type of stocks you should consider investing in.
It’s true: Patience is Virtue
When it comes to investing, we all want to reap what we sow as soon as possible. It’s easy to anticipate seeing results after making an investment and even easier to move around our investments when we don’t see them as soon as we’d like. However, this practice is contrary to Lynch’s famous beliefs and successful investment strategies. Lynch insists patience is critical. When you invest, it’s important to know you won’t always see results right away. Lynch tells those seeking investment advice to keep a steady hand when investing in something. He also reveals his best gains within his investing career have came in the third or fourth year after initially investing. Lynch insists you should leave your investment alone and explains one of your biggest struggles when investing will be ignoring worries and other temptations long enough to allow your investment to succeed.
Cyclicals are like Blackjack
Although Peter Lynch insists you should remain steady long enough to make a profit, he also voices if you stay in the game too long it’s libel to take all of your profit. Be patient, but also know when to take the money and run.