10 good investment quotes from Peter Lynch and Warren Buffet

1.“Profit in stocks goes to those who buy stocks on sale. There’s no such thing as risk free investment”. - Peter lynch
2.“Risk in investment is not knowing what you are doing”. - Warren Buffet
3.“Excellent investment opportunities come about when superior businesses experience a one-time event that depresses the stock price in relation to its intrinsic value”. - Warren Buffet
4.“Don’t own a stock for ten minutes if you don’t intend to won it for ten years”. - Warren Buffet
5.“The only time time to buy that which you don’t understand, is on the day with no ‘y’ in it”. - Warren Buffet
6.“The dumbest reason in the world to buy a stock is because it is going up”. - Warren Buffet
7.“Uncertainty is the friend of the buyer of long-term values”. - Warren Buffet
8.“A great investment opportunity occurs when a marvelous business encounters a one-time, but solvable problem. you just need to know the business to recognize this”. - Warren Buffet
9.“Your broker is like a doctor who charges his patients on how often they change medicines, and he is paid more not for what will make you better but rather from the stuff that the street is promoting”. - Warren Buffet
10.“One of the biggest mistakes is to focus on a stock price instead of its value”. - Warren Buffet

PETER LYNCH'S Rule of 72

The Rule of 72 is useful in determining how fast money will grow.Take the annual return from any investment,expressed as a percentage and divide it into 72.The result is the number of years it will take to double your money.With a 25 percent return,your money doubles in less than 3 years:with a 15 percent return it doubles in less than 5 years.

Mutual fund strategies by PETER LYNCH

1.Put as much of money into stock funds as you can.Even if you need income,you will be better off in the long run to own dividend-paying stocks and to occasionally dip into capital as an income substitute.

2.If you must own government bonds,buy them outright from the Treasury and avoid the bond funds in which you are paying management fees for nothing.

3.Know what kind of stock funds you own.when evaluating performance,compare apple to apples,ie,value funds to value funds.Don't blame a gold-fund manager for failing to outperform a growth stock fund.

4.Its best to divide your money among three or four types of stock funds(growth,value,emerging growth etc).So you will always have some money invested in the most profitable sector of the market.

5.When you add money to your portfolio,put it into the fund that's invested in the sector that has lagged the market for several years.

6.Trying to pick tomorrow's winning fund based on yesterday's performance is a difficult if not futile task.Concentrate on solid performers and stick with those.Constantly switching your money from one fund to another is an expensive habit that is harmful to your net worth.

PETER LYNCH

PETER LYNCH's "invest in what you know" strategy has made him a household name with investors both big and small.
An important key to investing,Lynch says,is to remember that stocks are not lottery tickets.There is a company behind every stock and a reason companies and their stocks perform the way they do.
During PETER LYNCH's thirteen successful years as amanger of the Fidelity Magellan Fund it was the top-ranked equity mutual fund in the nation.$1,000 invested in Magellan in 1977 was worth $28,000 when he handed over the reins of Magellan on may 31,1990.
Since his retirement from the Magellan Fund,Lynch continues as a member of the board of trustees of the Fidelity Group of Funds.Also read PETER LYNCH's 25 Golden Rules.

25 Golden Rules (by Peter Lynch)

1.Investing is fun, exiting, and dangerous if you don't do any homework.
2.your investor's edge is not something to get from wall street experts.Its something to already have.You can outperform the experts if you use your edge by investing in companies or industries you already understand.
3.Over the past decades the stock market has come to be dominated by a herd of professional investors.Contrary to popular belief,this makes it easier for the amateur investor.You can beat the market by ignoring the herd.
4.Behind every stock is a company.Find out what its doing.
5.Often,there is no correlation between the success of a company's operations and the success of its stock over a few months or even a few years.In the long term,there is a 100% correlation between the success of the company and the success of its stock.The disparity is the Key to making money,it pays to be patient,and to own successful companies.
6.You have to know what you own,and why you own it.
7.Long shots almost always miss the mark.
8.Owning stocks is like having children don't get involved with more than you can handle.The part-time stock picker probably has time to follow 8-12 companies,and to buy and sell shares as conditions warrant.There don't to be more than 5 companies in the portfolio at any one time.
9.If you can't find any companies that you think are attractive,put your money in the bank until you discover some.
10.Never invest in a company without understanding its finances.The biggest losses in stocks come from companies with poor balance sheet to see if a company is solvent before you risk your money on it.
11.Avoid hot stocks in hot industries.Great companies in Cold,non growth industries are consistent big winners.
12.With small companies,you're better off to wait until they turn a profit before to invest.
13.If you're thinking of investing in troubled industry,buy the companies with staying power.Also wait for the industry to show signs of revival.
14.If you invest $1000 in a stock,all you can lose is $1000,but you stand to gain $10000 or even $50000 over time if you are patient.The average person can concentrate on a few good companies,while the fund manager is forced to diversify.By owning too many stocks,you lose this advantage of concentration.It only takes a handful of big winners to make a lifetime of investing worthwhile.
15.In every industry and every region of the country,the observant amateur can find great growth companies long before the professionals have discovered them.
16.A stock market decline is a routine.If you are prepared,it can't hurt you.A decline is a great oppurtunity to pick up the bargains left behind by investors who are fleeing the storm in panic.
17.Everyone has the brainpower to make money in stocks.Not everyone has the stomach.If you are susceptible to selling everything in a panic,you ought to avoid stocks and stock mutual funds altogether.
18.There is always something to worry about.Avoid weekend thinking and ignore the latest dire predictions of the newscaster.Sell a stock because the companys fundamentals deteriorate,not because the sky is falling.
19.Nobody can predict interest rates,the future direction of the economy,or the stock market.Dismiss all such forecasts and concentrate on whats actually happening to the companies in which you're invested.
20.IF you study 10 companies,you'll find 1 for which the story is better than expected.If you study 50,you'll find 5.There are always pleasant surprises to be found in the stock market.Companies whose achievements are being overlooked on wallstreet.
21.If you don't study any companies,you have the same success buying stocks as you do in a poker game if you bet without looking at your cards.
22.Time is in your side when you own shares of superior companies you can afford to be patient-even if you missed Wal-Mart in the first five years,it was a great stock to own in the next five years.Time is against you when you own options.
23.If you have stomach for stocks,but neither the time nor the inclination to do the homework,invest in equity mutual funds.Here its a good idea to diversify.You should own a few different kinds of funds,with managers who pursue different styles of investing:growth,value,small companies,large companies etc.Investing in six of the same kind of fund is not diversification.The capital gains tax penalizes investors who do too much switching from one mutual fund to another.If you've invested in one fund or several funds that have done well,don't abandon them stick with them.
24.Among the major stock markets of the world,the U S market ranks eighth in total return over the past decade.You can take advantage of the faster-growing economies by investing some portion of your assets in a overseas fund with a good record.
25.In the long run,a portfolio of well-chosen stocks and or equity mutual funds will always outperform a portfolio of bonds or a money-market account.In the long run,a portfolio of poorly chosen stocks won't outperform the money left under the mattress.