Peter Lynch: Investors Lost in Corrections

Posted by admin on Thursday, January 18, 2018

Peter Lynch Money Quote saying everyone worries about overvalued stock market drops to correct bubbles in valuation while they have lost more in fearful protective moves. Peter Lynch said:
 

 

“Far more money has been lost by investors preparing for corrections, or trying to anticipate corrections, than has been lost in corrections themselves” — Peter Lynch

 

 

Peter Lynch is saying that many investors lose more money by trying to anticipate stock market corrections and selling their investments before a correction occurs, rather than just remaining invested through an actual market correction. By selling early to try to avoid losses, these investors often end up missing out on gains when the market rebounds. Lynch argues it is usually better to remain invested with a long-term perspective rather than trying to time short-term market movements, which is very difficult to do successfully.

1. It’s very difficult to successfully predict short-term ups and downs in the market. Most individual investors struggle with market timing.
2. By remaining invested through downturns, you’ll be able to benefit when prices rebound and the market rises again over the long run.
3. Investors who try to time the market often miss out on gains if they sell before a recovery.

Lynch believes focusing on long-term investing in strong companies, rather than short-term trading, leads to better overall returns for most people.

Categories: investment Tagged:correctionsinvestorspeter lynch