Peter Lynch is a stock investor on Wall Street and a research consultant for Fidelity Investments. His estimated net worth is more than $350 billion, not too bad for someone who started as a golf caddy for the former president of Fidelity in 1966. One of his claims to fame is growing the Magellan Fund from $18 million to $14 billion in assets while it was under his management from 1977 to 1990.

Mr. Lynch is also famous for coining one of the most well-known phrases in modern consumer investing, “Invest in what you know.” This principle is embraced by the average stock investor who does not have time to pore over financial reports or learn complex quantitative measures. Most people are considered experts within certain fields and using his principle allows them to find good stocks that are undervalued.

One of the other beliefs held by Mr. Lynch is that an individual investor can make more money from stocks than can a fund manager. This is because individual investors can identify good investments through their daily lives, long before Wall Street catches wind of these. In his writings, Mr. Lynch details the many investments he discovered when he was driving or shopping at the mall.

The belief that there are investment opportunities all around us is an optimistic one. We just need to focus on what is familiar to us, what we know. Following Mr. Lynch’s philosophy, individuals will invest in industries they understand, even if the industry or sector is predicted to deliver less than stellar performance.

Mr. Lynch promotes investment in undervalued stocks but he also advises investment in fast-growing companies within up-and-coming industries. The company should be profitable, have a strong business model, and feature a reasonable share price. In addition, we should stay fully invested, ignoring market fluctuations.

Keep learning more:

1. Why People Invest In Stocks


2. The Different Ways To Invest In Gold


3. Stocks 101: How to Invest in the Stock Market


4. Mutual Funds 101: How to Invest in Mutual Funds


5. Bonds 101: How to Invest in Bonds


6. What Is Value Investing


7. Corporate Bonds 101: An Introduction to Corporate Bonds

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