
Investment God Peter Lynch’s Legacy- Invest In What You Know

If you’re familiar with the world of finance, you must have heard about Peter Lynch.
If you’re hearing that name for the first time, we’ll have you know that Peter Lynch is considered a god in the world investment and banking. He is also one of the most successful mutual fund managers in the world. From 1977 to 1990, he managed Fidelity’s Magellan Fund and averaged a return of 29% annually.
He regularly outperformed S&P 500 throughout those years, too. With all that success, you’d think he had a crystal ball stashed away in his office. But, you’d be happy to know that his approach entailed only one simple concept: Invest in what you know.
Unsplash | Investment is an excellent means of increasing your revenue
Investing in what you know entails doing business with companies whose business model and products you are well accustomed to. And no, you don’t need to have an MBA for this. Ronald Read is the biggest example of this. He was a simple janitor with no formal degrees. Believe it or not, he was worth millions of dollars by the time he reached his death bed. Read succeeded because he only invested in companies whose names he knew.
This tip goes out, especially to novice investors. It is far simpler to evaluate products and services that you know. How? Look at this way. You already have the customer’s perspective when you already know the product that you’re going to invest in.
First and most important of all, you know the product’s marketing value. Next, you gain an opinion about the product, like whether or not it adds value to your life, the frequency with which you’d purchase it, and how much you think it’s worth.
Unsplash | Smart investment can go a long way
Your familiarity with the product makes the investment more relatable, understandable, and interesting. Take a second to think about one that you’re the least interested in and imagine that you’re about to invest in it.
It could be anything: data mining, teaching, artificial intelligence, skincare, etc. You’re bound to be bored when you’re reading up on its products. You might even misunderstand or overlook important information in a haze of boredom!
Do you want that to happen to you? We think not.
Here’s how you can find companies that you should be investing in.
What are your go-to products and where do you get them?
Think about the purchases you’ve made over the last couple of months. The sales on items like toiletries, groceries, and household items has increased drastically since the lockdown started. See where we’re going with this?
You need to look for products that are resilient at a particular time. You can even look at the label on the products you get. Most of them would be made by Colgate-Palmolive, Proctor & Gamble, Johnson & Johnson, or Unilever. There’s another hint for you.
What industry do you work in?
You can use your professional expertise as a source of investment, too. If you’re a software engineer, you might want to look into investing in Microsoft or Amazon. If you’re a data mining expert, you might want to look into data mining giants like Altar or Intellias.
What are your hobbies?
Your hobbies and interests can also point you in the right direction, just like your industry does. If you love to garden, look into landscaping companies. If you’re into cars, try looking at manufacturers or retailers.
Unsplash | Take the time to research the company you are willing to invest in
In any case, even though you’re investing in familiar products, don’t skip the research. Before investing in a company or service, you have to track its performance and make a logical decision.
More in Legal Advice
-
Naomi Campbell is Still Battling it Out with an Ex-Boyfriend Years after Their Break up–Here’s Why
Naomi Campbell is no stranger to controversy whether it has something to do with her professional or personal life. And it...
October 22, 2020 -
The Retiree’s Guide to Getting and Recovering from a Divorce Later in Life
Divorce rates among couples who are in the 60 and over age group have notably risen in recent years. This is...
October 20, 2020 -
The First GMIT Virtual Career Fair- Why You Need to Invest Your Time in Career Fairs if You Want to Land a Job Anytime Soon
If you’re a college student or a recent graduate, you must be aware of all the career fairs taking place around...
October 14, 2020 -
Hitting Your Diamond Wedding Anniversary but Choosing to Part Ways? Follow These Tips For a Smooth Transition Into Single Life
Divorces tend to be messy affairs. They can be overwhelming both mentally and financially. To separate from a person you had...
October 13, 2020 -
Haven’t Received Your First Stimulus Check Yet? Here’s How You Can Find Out Why There’s a Holdup
Stimulus checks are checks sent to taxpayers to stimulate a sluggish economy. The U.S government provides some money to taxpayers to...
October 5, 2020 -
Are You a Lawyer Just Starting Out Their Career? Here Are a Few Expert Tips on How To Get Your Career Off to a Good Start
Your law degree has finally been completed. You’ve persevered through the daunting legal training. Your name is now signed on the...
October 5, 2020 -
Divorced or Separated? Know These Genius Hacks to Make Co-Parenting Easier and Better
Just imagine: you and your partner used to be head over heels with each other. Now, both of you want out...
September 30, 2020 -
Don’t Take it to The Court Immediately! Simple Tips to Prevent Your Marriage from Heading to Divorceville
When sparks no longer fly, married couples head to Splitsville. Divorce isn’t always expensive but depending on how you end things...
September 25, 2020 -
Roping in a Finance Lawyer For Your Business? Here Are a Few Tips to Help You in the Process
Dozens of business houses shatter every day just because they don’t have a good financial lawyer. And not just any business...
September 25, 2020