Investment Strategy. True or False: “Invest In What You Know”?
Peter Lynch is one of the all-time greats. While running the Fidelity Magellan Fund from 1977 to his retirement in 1990, he generated almost hard-to-believe annualized returns of 29.2% per year. And that was before the roaring bull market of the 1990s.
If there were a pantheon of investing gods, no one would question Peter Lynch’s place in it.
But Lynch was also responsible for some of the most misunderstood investment advice in history: “Invest in what you know.”
This is actually pretty solid advice — if used right. Wall Street analysts and fund managers often never leave their elegant New York offices. That means regular, everyday investors can see a budding trend years before Wall Street, simply by virtue of having boots on the ground. Lynch routinely wrote that some of his best investment ideas came from trips to the mall.
