Peter Lynch was born in the year 1994 in Massachusetts. He schooled, and graduated with a degree in finance from Boston College. After his first degree, he joined the military, where he worked for two years. He later enrolled in a master’s program in Business administration at the University of Pennsylvania.
He later worked at the Fidelity investment, as an investment analyst. In the long run, he was promoted to a director and worked for three years. He later became the manager for Magellan fund until his retirement.
Lynch was an expert in investments. He came up with eight principles that an investor should consider in order to be successful. He not only invented the principles, but also put them in to practise and turned out to be successful. Firstly, he argued that, there was the need for an investor to consider what he/she owns, before investing. This is very crucial in the investment process. He argued that an investor needs to get ownership and not the stock, which may be a risk. He used a house as an example, to elaborate this principle. From his argument, it is clear that, it is important for an investor to always consider what they will own in the investment company, and not the stock because the stock has many disadvantages compared to the ownership. This principle is significant as it assists investors to think critically, before venturing in any business.
The second principle is that, investors need to set an effective financial plan since, it is difficult to predict the risks in the market. The financial plan is beneficial because it assists investors to allocate resources based on the possible risks in the market. This will assist the investor to overcome risks, through effective management.
The third principle revolves around the selection of the best company before investing. Lynch argued that, investors need to first take time and carry out research before investing in a company. This is because there are companies that may have a good public...