Learn to earn peter lynch pdf1/20/2023 ![]() ![]() ![]() Having a consistent financial plan and sticking to it is a critical component of long-term investingīackground-Peter Lynch’s original mid-1990s study: People want to buy low and sell high, or more specifically, over a given period, people desire to purchase their investments at the lowest price possible and sell them at the highest price possible and then frequently repeat this magic formula to increase wealth.Where one invests-i.e., which broad-based stock index one chooses to track-may be more critical than when one invests.More-volatile markets will accentuate the difference between the unlucky investor and the omniscient lucky investor.From 1994 to 2020, the annual-return difference between the absolute worst-timed unlucky investor, the absolute best-timed lucky investor, and a start-of-the-year investor in an S&P 500 fund was 8.7%, 10.2%, and 9.6% respectively-an annualized difference of only 1.5% between the worst-timed and an omniscient best-timed investor.Famed mutual fund manager Peter Lynch conducted a study that is often cited by investment professionals-to demonstrate that market timing is “a waste of time”-but he never publicly provided numerical details nor backup this article conveys real-world numbers on Lynch’s concept by replicating it with modern funds across recent decades. ![]() Market timing is difficult and obsessing about it may be unwarranted for the consistent long-term investor. ![]()
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