10 key investing rules of Peter Lynch

                Peter Lynch is Known as an ever green fund manager in United states.He managed fidelity Magellan fund from 1977 to 1990. His average annualised return for 13 year period was 29 %.  He believed in Common sense approach by investing in known business models only.He always checked under valued stocks, which can yield better gains over a period.   Let us check Peter's 10 golden Rules:

 

1. A stock market decline is a great buying opportunity.Never postpone your investing at that time.

 

2. Too much diversification will reduce your gains.Concentrate on well studied winning stocks only.

3. Learn to examine large number of shares.Otherwise,you cannot select the right stocks.

4. In the long run, superior stocks will beat all type of bond returns.

5. Shares are not lottery tickets.Learn the activities of the company before you invest.Visit the company outlets to see the demand of  products.If people are buying it, then check the financials.

6. Don't look at index only.Check how many shares advanced and how many declined.

7. Fifth standard maths is sufficient to succeed in stock market.But,you should do the home work.

8. Never expect to win all times.Success of 6 out of 10 is a good thing.

9. If you cannot analyse the stocks self, invest in good mutual funds.

10. Look into the 'Earnings' of a company to ensure future gains.