The stock market directory of four steps from Peter Lynch: “Buy what you know, read presentations, know the market cycle and summarize your thesis” – Walmart (NYSE: WMT)

The famous investor Peter Lynch Provide an important advice to those who are thinking about entering the stock market.

What happenedLynch, who is famous for an average annual return of 29 % during his 13 -year -old work in the Magellan Fund at Fidelity, warned against investing in the stock market without adhering to four specific guidelines.

In an interview with Yahoo a few years ago, Lynch shared his ideas about investment. His first advice was to invest in the companies you know, using his successful investments in Dunkin ‘Donuts as an example.

However, he added an important warning: Simply knowledge of the company is not enough; One must also understand his business model and story.

Second, Lynch stressed the importance of seeing investor offers to gain a more profound understanding of the company. He pointed out that today’s retail investors have the same immediate access to professional investors’ information, which is a noticeable shift when he started his career.

Third, Lynch stressed the need to understand the company’s growth stage, or “the game of the ball game”, referring to Walmart Inc. An example of a company that continued to expand even after 25 years of work.

Also read: Peter Lynch shares tips: “There is no defect in losing money on stocks, what is shameful is to stick to the arrow when the basics deteriorate.”

Finally, Lynch suggested that potential investors be able to intensify their investment theses at some major points. This practice helps to understand the reason for buying a specific share and when it is sold.

Lynch concluded the reassurance of investors that all the investment thesis will not succeed, saying: “Maybe you are right six times out of 10, and perhaps six and a half.” However, if the thesis remains valid, it is recommended to purchase more stocks when the shares decrease.

Why do it matterLynch’s advice comes at a time when retail investment is increasing, as more individuals seek to move in the stock market.

His guidance provides a road map for potential investors, focusing on the importance of comprehensive research, understanding the company’s growth stage, and the ability to clarify the investment thesis.

Since the scene of investment changes, the lynch visions remain a valuable resource for those looking to make enlightened decisions in the stock market.

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Teacher Peter Lynch’s investment: “If you cannot explain a 11 -year -old child in two minutes or less why you have stocks, you will not own it.”