One of the most prolific names in the investment world, Peter Lynch, is something of an American finance legend. The individual who helped Fidelity’s Magellan Fund achieve a 29.2% annual return, doubling that of the S&P index, has earned bragging rights.
Given Lynch’s success, it stands to reason that when he gives advice to 60-year-old investors, they would do well to listen. This isn’t to say that Lynch is the only name worth hearing from, but when you have someone this successful giving you advice, it’s worth hearing them out.
1. “The Stock Market’s been the best place to be over the last 10 years, 30 years, 100 years. But if you need the money in 1 or 2 years, you shouldn’t be buying stocks.”
Lynch knows the market is the best place to make big money.
As a 60-year-old investor, the whole idea that someone would be looking to make significant earnings in 1-2 years in the stock market is an essential piece of advice from Peter Lynch. In other words, Peter’s arguably saying that anyone at this point in their life should have either A) already made their money or B) need to look at alternative options like annuities if they need big cash infusions right now.
2. “You never can predict the economy. You can’t predict the stock market.”
Let this be a reminder, you can’t and shouldn’t try to predict the market.
With this quote, Lynch is telling every investor, 60 years old or otherwise, something they should already know: you can’t predict the market, no matter how hard you try. Trying to time getting into the market on what you think is a “down” day is a good way to end up losing far more than you thought you might be earning.
3. “You lose money fast in the stock market. You can’t make it fast.”
It’s easier to lose money than make money when investing.
This is yet another classic Peter Lynch reminder that by the time you turn 60, you should have already made a lot of your money. The likelihood of entering the market today and earning enough to significantly alter your retirement lifestyle is low. It could happen if you catch big days with stocks like NVIDIA or Oracle, but it’s far from a guarantee.
4. “Buy only what you understand, believe in, and intend to stick with – even when others are chasing the next miracle.”
Many near-retiree investors would do well to buy ETFs and hold.
At this point in a near retiree’s life, trying to get creative with the stock market and making investments into things you are not familiar with isn’t a smart move. The best play is to stick with what you know and may have already been working for you in the past. Let everyone else, especially those who have more time to make money back, try to chase the next big thing.
5. “If you’re in the market, you have to know there’s going to be declines.”
You can win and lose in the stock market.
The hope is that someone in the market already knows that there is going to be a loss, it’s just an inevitable part of the financial game. However, it’s a strong reminder from Lynch that even at 60 years old, when you want to minimize losses as much as possible, you still have to be careful about the investments you are making.
6. “For some reason, you lose money rapidly in the stock market but don’t make it rapidly.”
Making money is the hardest thing to do with investing.
It’s likely safe to say that, as an investment guru, Peter Lynch said this quote with a level of humor, as he well knows that making money in the stock market is far harder than losing it. This is something every 60-year-0ld investor would do well to remember. No matter how careful they want to be with their money at this age, it’s still going to be easier to lose part of a retirement fund than add to it.
7. “When you sell in desperation, you always sell cheap.”
Panic selling is a bad move, according to Lynch.
As the author of “One Up On Wall Street: How to Use What You Already Know to Make Money in the Market,” Lynch is uniquely qualified to emphasize that panic selling is one of the most detrimental actions an investor can take. Time and time again, this has happened as investors, young and old, see down days with market volatility and get out, only to miss the market’s return and the profits they might have otherwise had.
8. “Find something you enjoy doing and give it everything you’ve got, and the money will take care of itself.”
Don’t stress over money, go do something you enjoy instead.
Taken from Lynch’s book: “Learn to Earn: A Beginner’s Guide to the Basics of Investing and Business,” it’s clear that Lynch wants you to invest and forget about it. At 60 years old, you should be thinking about how to enjoy your golden years and not worrying about investments every day.
9. “The typical big winner in the Lynch portfolio (I continue to pick my share of losers, too!) generally takes three to ten years or more to play out.”
It can take years for big stock moves to play out.
This is easily yet another reminder from Lynch that every investment you make needs to play out over time. Any thought that you are going to get rich quickly with a stock, while it is not impossible, isn’t likely, and instead, you’re going to have to play the long game. This means that any investments you made right before 60 or at 60 need time to play out and show their real earning potential.
10. “This is one of the keys to successful investing: focus on the companies, not on the stocks.”
Don’t focus on the trade, focus on the name.
If you’re a 60-year-old investor, this is great advice, as you don’t want to play games trying to learn everything about yields and P/E ratios. Instead, you want your portfolio to reflect a good mix of companies that have strong earning potential in the market due to their stability as a company. It’s for this reason that so many people have names like Apple, Google, and Microsoft in their portfolio, even if their stocks are volatile at times, but they consistently grow.
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