Who wouldn’t listen to a guy who turned $18 million into $14 billion? Considered an investment guru by many loyal followers, the Peter Lynch books will help educate and guide investors to make sound financial decisions that can really boost investment portfolios and returns.
Between 1977 and 1990, as manager of the Magellan Fund at Fidelity Investments, Lynch averaged a 29.2% annual return and, as mentioned above, increased the assets under management (AUM) from $18 million to $14 billion over thirteen years.
Undoubtedly, he was one of the most successful investors of all time. As a result, Peter Lynch’s books have sold in the millions as investors flocked to learn investment advice from one of the best money managers. Readers will learn his approach to picking stocks and Peter Lynch’s investing philosophy from his books.
Mr. Lynch has written a few different books. Some readers have recommended that his books be read in the following order:
- Learn to Earn
- Beating the Street
- One Up on Wall Street
The following is an overview of the information investors can expect to find in each of Peter Lynch’s books.
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The Three Peter Lynch Books
Learn to Earn
It makes sense that people would recommend Learn to Earn as the first of Lynch’s books to read. It begins with an introduction to the history of capitalism and slides into the fundamentals of personal finance and investing, which even older kids in high school can benefit from.
It’s the perfect guide for new investors because the book teaches basic financial knowledge, how the stock market works, and how to invest. Lynch is frankly doing people a service by having readers reflect on their spending habits and learn how to save before they direct their money into investing.
As Lynch progresses with Learn to Earn, he teaches people to think like an intelligent investor and how to look for investment opportunities. Readers will receive a lesson on how to assess companies to invest in potentially and how to analyze their financials and annual reports.
One of the primary investment strategies Lynch is known for is to invest in what you know. If you know the company and use its products or services, then start researching that company further and consider investing in it. He suggests investors not just follow trends or what’s popular as they must be regarded as long-term investments.
Beating the Street
Similar to Learn to Earn in tone and style, Mr. Lynch manages to take complex topics and break them down into simpler terms. He takes this book one step further, provides a more definitive investment strategy, and advises how to pick stocks and mutual funds to create an investment portfolio with high return potential.
Lynch further thoroughly discusses researching companies, industries, and mutual funds. Lynch also educates investors on:
- how to pick stocks
- how to choose from different stocks
- when to buy
- when to sell
- when to invest in more of the same stock
Lynch’s overall investment strategy is to find good companies at reasonable valuations and watch them grow, along with investment returns. By following his guide on finding good companies with solid management, investors should learn to make financial decisions that will help them make some money.
One Up on Wall Street
This book is written by Peter Lynch in collaboration with John Rothchild. The authors set out to convince readers that even average investors can beat Wall Street professionals by using the information provided to everyone about how companies operate and earn their profits. Lynch emphasizes again in this book that research is the key to making sound investment decisions. He also emphasizes that investors stick with ‘what you know’ rather than investing in trendy or popular-at-the-moment sectors or companies.
When investors analyze a company, they should understand where it is heading in the future and its earnings prospects. If investors can’t answer these questions after completing some research, it’s not a worthwhile investment, according to Lynch.
Mr. Lynch also discusses which types of investments to avoid, which he refers to as distractions. For example, Lynch observes that many investors may not fully understand options and futures, which, although good investment vehicles, should not be considered as get-rich-quick products.
Lynch’s message and investment philosophy are the same as those of his other two books. He focuses on investing in undervalued companies with room to grow and sound financials.
Peter Lynch Books Are a Good Place to Start
Some critics feel that the Peter Lynch books may be outdated. However, the fact remains that financial literacy is a subject matter that hasn’t been adequately discussed with youth or adults trying to make serious financial decisions for themselves and their families. With average credit card debt for American families reaching nearly $7,000, some basic financial education like Lynch has provided could really help Americans make better decisions without resorting to high-interest debt.
In conclusion, the Peter Lynch books are a great way to learn about investing. Many reviewers have praised him for writing often complex concepts into easy-to-read and understandable books.
For investors new to the game and those looking to improve, the Peter Lynch books provide excellent information about different investment strategies, making them a great place to start learning.
Related Articles on Dividend Power
- 25 Peter Lynch Quotes You Must Read Before Buying Stocks
- Peter Lynch Net Worth: How He Made His Millions
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Nadia Tahir is a freelance writer and content creator. She mostly writes in the areas of lifestyle and personal finance. She also enjoys writing on her blog about motherhood at This Mom is On Fire.