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One Up On Wall Street Peter Lynch Summary

Have you ever thought of dabbling in the stock market, but stopped yourself because you don’t have the skills of a professional investor or analyst? Well, guess what? You don’t need to be a pro. You can easily find investment opportunities that can multiply your money tenfold or more. It all starts with paying attention to your daily life and then doing enough research to increase your chances of a successful investment. In his book, One up on Wall Street, Peter Lynch teaches us his philosophy about investment. In this summary, I’ll share with you three key lessons that I learned from his book.

Key Lesson #1: If you look around, you can find great investment opportunities

Some people think that great investment opportunities come up only once in a lifetime. But that’s not quite true. If you just look around you, in your home, where you work, or even where you shop, you can find companies that have the potential to grow ten times or more. When you find a stock like this, you can see the product entering the market and becoming popular. Peter says how he invested in Apple stock in its early times after buying a computer for his children and then started to see apple machines everywhere. If you keep an eye out for promising companies, you can buy their stock early and benefit from their growth. Just before investing make sure that the specific product you have noticed will have a large impact on the success of the company.

Key Lesson #2: Stay away from popular stocks and and avoid risky investments

In stock market investing, there is a phrase that you should remember, “Don’t Believe the Hype”. There are some stocks right now that are called youtube stocks, you see all these YouTubers make videos about them. These stocks usually become popular and go up massively in a short time. But sure enough, they come crashing down. It’s because the stock value is not supported by the real profit. That’s why when you invest in a stock because it’s the hottest thing on the market, you risk losing money. When you hear people say such and such stock is the next apple, stay away from it. These stocks rarely live up to the expectations and you end up losing money. In investing knowing what stocks to invest is very important to prevent losing great money.

Key Lesson #3: Create a diverse portfolio, and learn when to buy and sell stocks

By investing in the stock market, you can expect to gain between 12-15 percent annual gain in the long term. This range of gain seems a reasonable one but to achieve it you must design a good portfolio. You should invest in as many good stocks as you can find. The more you own, the higher the chances of owning a stock that will be tenfold. Also, you need to learn when to buy and sell stocks. Usually, between October and December are good times to buy stocks. It’s because many investors will sell to avoid paying high taxes. This phenomenon is known as Tax loss harvesting. But the ultimate best time to buy stocks is during market crashes. Usually buying at this time pays huge when the market recovers. Right now in mid-2022, we are in the middle of one of the biggest crashes I’ve seen since I started investing and I bet this is the best time to enter the market.

So in summary, investing is not a complex task. Just look around you in your daily life and I bet you can find something that is becoming popular. But make sure to avoid those hype stocks that you see on Youtube. Also, diversify your portfolio and never miss the market crashes to buy good companies.

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