Peter Lynch emphasized the futility of trying to time the market in a rare interview with Fidelity.
The legendary stock picker and "One Up on Wall Street" author emphasized that investors need to do their own research, hold their nerve during sell-offs, and stay open to a wide range of opportunities.
Lynch grew its assets under management from 18 million in 1977 to 14 billion in 1990 and delivered an annual return of 29% over 13 years.
This is the first thing. The stomach is the most important part of the stock market. The brain isn't it. Lynch said that investors need to know their pain tolerance and succeed if they keep their holdings.
There are two If the market goes down 10%, you have to ask yourself what you're going to do. I don't know what to do if it goes down. I don't know if I'll sell. I don't know if I'm going to leave. You should reduce your stock holdings if that's your answer.
There are three. They're not lottery tickets. Every stock is owned by a company. If the company does well the stock market will do well as well. The company is what you research.
There are four. When buying a house, a fridge, or a car, the public is careful. They will work hours to save money. They heard a crazy idea on the bus. It is gambling. That is not investment. That is not a study. It's just speculation.
There are five. You want to get out in the seventh or eighth when you play baseball. Walmart, which only had stores in 15% of the US as a 10-year-old public company, spent the next 30 years expanding nationwide, and its stock went up 50-fold.
There are six. I'm probably out when the business gets better. When there is no room to grow, you sell the company.
There are seven. The edge of the individual has improved over time. People have a lot of biases. They won't look at any of the companies. They're only looking at companies that are growing. They won't look at the process of turning things around. Companies with unions. You have to be able to say yes or no.
There are eight. The stock market is a good place to be for a long time. More people have lost money waiting forCorrections than in actualCorrections Predicting market highs and lows isn't useful.
There are nine. If you spend 13 minutes a year on economics, you have wasted 10 minutes. It doesn't help. I've tried to call the psychic hotline, but they don't have one. It hasn't made a difference. What's happening right now is the only thing I would pay attention to.
Value investors missed out on huge gains because they dismissed the likes of Amazon and Alphabet as overpriced. Adam Seessel is a fund manager and writer.
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